Revision No. 14 (October 2014)
CONTENTS
1-1
Page
1.
INTRODUCTION ............................................................................................................ 1
1.1
Purpose of Handbook .......................................................................................... 1
1.2
Need to Employ Consultants .............................................................................. 1
1.3
Authority to Employ Consultants ....................................................................... 2
1.4
Funding for Employment of Consultants............................................................ 2
1.5
Consultants Selection Board ............................................................................... 2
1.6
Departmental Consultants Selection Committees (DCSCs) ............................... 3
1.7
Consultancy Assignments with Fees Not Exceeding the Quotation Limit ......... 5
2.
ENGINEERING AND ASSOCIATED CONSULTANTS SELECTION BOARD ......... 6
2.1
Composition of EACSB...................................................................................... 6
2.2
Terms of Reference of EACSB ........................................................................... 6
2.3
EACSB Administrative Structure ....................................................................... 7
2.4
Consulting Engineers' Committee ...................................................................... 7
2.5
Consultancy Agreements Committee.................................................................. 7
2.6
EACSB Information ........................................................................................... 8
3.
PROCEDURES FOR SELECTION AND ENGAGEMENT OF CONSULTANTS ....... 9
3.1
Outline of the System ......................................................................................... 9
3.1.1 Fee Competition Element ...................................................................... 9
3.1.2 Selection ................................................................................................ 9
3.1.3 Stages of Selection............................................................................... 10
3.1.4 Alternative Technical Proposal ............................................................ 11
3.1.5 Direct Selection ................................................................................... 11
3.1.6 Agreements Based on Time-charges ................................................... 12
3.1.7 Exceptional Procedures ....................................................................... 12
3.2
Types of Submission to the EACSB ................................................................. 13
3.3
Details of Submissions...................................................................................... 13
3.3.1 General Format of Submissions to the EACSB .................................. 13
3.3.2 EACSB Meetings and Deadline for Submissions ............................... 14
3.3.3 Submissions for EACSB’s Consideration by Circulation ................... 14
3.4
Pre-submission Procedures ............................................................................... 15
3.4.1 Preliminary Steps ................................................................................. 15
3.4.2 Allocation of Agreement Number ....................................................... 15
3.4.3 Assessment Panel ................................................................................ 16
3.4.4 Avoidance of Conflicts with Private Interest ....................................... 16
3.5
Longlisting of Consultants ................................................................................ 17
3.5.1 Consultants’ Information ..................................................................... 17
3.5.2 Selection Criteria ................................................................................. 17
3.5.3 Invitation for Expression of Interest .................................................... 19
3.5.4 Open Invitation for Expression of Interest .......................................... 19
3.6
Shortlisting of consultants ................................................................................ 20
3.6.1 Forming of the Shortlist....................................................................... 20
3.6.2 Stage 1 EACSB Submission (Shortlisting Stage) ................................ 20
3.7
Marking Scheme for Technical Proposals ........................................................ 21
Revision No. 14 (October 2014)
CONTENTS
1-2
Page
3.8
3.9
3.10
3.11
3.12
3.13
3.14
3.15
3.16
3.17
3.18
4.
Invitation for Technical and Fee Proposals ....................................................... 24
3.8.1 Procedures relating to Invitation for Technical and Fee Proposals ..... 24
3.8.2 Submission of Technical and Fee Proposals ........................................ 26
3.8.3 Invitation Letter ................................................................................... 26
3.8.4 Changes in Circumstances ................................................................... 28
Pre-submission Meeting with Shortlisted Consultants ..................................... 29
Submission and Assessment of Technical Proposals ........................................ 29
Submission and Assessment of Fee Proposals .................................................. 30
3.11.1 Fee Proposals ....................................................................................... 30
3.11.2 Technical /Consultancy Fee /Fee Quality Weightings ......................... 33
3.11.3 Additional Services ............................................................................. 34
3.11.4 Notional Resident Site Staff On-Cost .................................................. 37
3.11.5 Opening of Fee Proposals .................................................................... 38
3.11.6 Pre-tender Estimates and Examination of Fees and Rates of
Consultancy Proposals ......................................................................... 38
3.11.7 Combined score assessment ................................................................ 40
Stage 2 EACSB Submission (Nomination Stage) ............................................ 41
Notification of Technical Marks, Fees and Manpower Input to Shortlisted
Consultants........................................................................................................ 42
Release of Information on Consultancy Studies ............................................... 43
Direct Selection of a Single Consultant for Fee Negotiation ............................ 43
Summary of Steps in Appointment of Consultants ........................................... 44
Variations – Submission to EACSB.................................................................. 44
Procedures in the Selection of Consultants for Small Consultancy
Assignments ...................................................................................................... 45
THE AGREEMENT....................................................................................................... 49
4.1
Types of Agreement .......................................................................................... 49
4.1.1 Feasibility Study Agreement ............................................................... 49
4.1.2 Investigation Agreement ...................................................................... 50
4.1.3 Design and Construction (D & C) Agreement..................................... 50
4.1.4 Investigation, Design and Construction (IDC) Agreement ................. 50
4.1.5 Other Types of Agreement ................................................................... 50
4.2
Components of the Agreement ......................................................................... 50
4.3
Memorandum of Agreement ............................................................................. 51
4.4
General Conditions of Employment ................................................................. 51
4.5
Special Conditions of Employment .................................................................. 51
4.6
The Schedule of Fees ........................................................................................ 52
4.6.1 Payment Schedule ............................................................................... 53
4.7
The Brief ........................................................................................................... 57
4.8
Design Certificate ............................................................................................. 59
4.8.1 Background .......................................................................................... 59
4.8.2 Standard Form of Design Certificate ................................................... 59
4.9
Standard Documents for Direct Employment of Resident Site Staff by
Consultants........................................................................................................ 59
4.10
Standard Forms ................................................................................................. 60
4.11
Reimbursable Items .......................................................................................... 61
Revision No. 14 (October 2014)
CONTENTS
1-3
Page
4.12
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.20
4.21
4.22
4.23
4.24
4.25
4.26
4.27
4.28
4.29
4.30
5.
4.11.1 Fair and Open Competition ................................................................. 61
4.11.2 Definition ............................................................................................. 61
4.11.3 Procedures ........................................................................................... 61
Computer Facilities ........................................................................................... 63
Quality Management System Certification of Consultants .............................. 63
Electronic Dissemination of Tender Documents .............................................. 63
Environmental Monitoring and Audit (EM&A) Programme –
Arrangement of Consultancy for Implementation of EM&A for Projects
undertaken by Consultants ................................................................................ 63
4.15.1 Introduction ......................................................................................... 63
4.15.2 General Principle ................................................................................. 63
4.15.3 Standard Arrangement ......................................................................... 64
Interest on Overdue Payments for Consultancy Agreements ........................... 64
Safety Training for Resident Site Staff ............................................................. 64
Electronic Dissemination of Invitation Documents for Consultancies ............. 65
Electronic Submission of Consultancy Proposals on Removable Media ......... 65
Adherence to Staff Proposals ............................................................................ 65
Professional Indemnity Insurance ..................................................................... 65
Project Implemented in Phases ......................................................................... 65
Use of Legal Consultants in Connection with Works-Related Consultancy
Studies ............................................................................................................... 66
Site Supervision of Civil Engineering Contracts .............................................. 67
Review of Preliminary Design before Proceeding with the Detailed Design
.......................................................................................................................... 67
Confidentiality Clauses ..................................................................................... 67
Ethical Commitment by Consultants ................................................................ 67
Retention of Documents and Inspections ......................................................... 67
Retention of Money Payable to Non-resident Consultants for Settlement of
Profits Tax ......................................................................................................... 67
Setting Off Money due to the Government from Defaulting Consultants ........ 68
FEE REMUNERATION ................................................................................................ 69
5.1
General .............................................................................................................. 69
5.2
Types of Fee Remuneration .............................................................................. 69
5.3
Fixed (lump sum) Fee ....................................................................................... 70
5.3.1 Applicability ........................................................................................ 70
5.3.2 Adjustment of Lump Sum Fee for Inflation ........................................ 70
5.3.3 Guidelines on Negotiation of Lump Sum Fee ..................................... 70
5.4
Time Charge Fees ............................................................................................. 72
5.4.1 General ................................................................................................ 72
5.4.2 Basic Rates .......................................................................................... 72
5.4.3 Reimbursable Disbursements .............................................................. 73
5.4.4 Application of Rates ............................................................................ 73
5.5
Fees in Foreign Currencies ............................................................................... 73
5.6
Compulsory Insurance ...................................................................................... 73
Revision No. 14 (October 2014)
CONTENTS
1-4
Page
6.
DIRECT EMPLOYMENT OF RSS BY CONSULTANTS ........................................... 74
6.1
Normal Arrangement ........................................................................................ 74
6.2
Minimum Qualification and Experience and Duties of Resident Site Staff ..... 74
7.
EXECUTION OF THE AGREEMENT ......................................................................... 75
7.1
Authority to Enter into Agreement ................................................................... 75
7.2
Consultants which are Limited Liability Companies ....................................... 75
7.3
Prevention of Bribery and Declaration of Interest ............................................ 75
7.4
Preparation of Documents ................................................................................ 75
7.5
Signing the Agreement ...................................................................................... 76
7.6
Distribution of Documents................................................................................ 76
8.
MANAGEMENT OF CONSULTANTS ........................................................................ 78
8.1
General .............................................................................................................. 78
8.1.1 Purpose of Management ...................................................................... 78
8.1.2 Principles of Management ................................................................... 78
8.1.3 Role of the Managing Office ............................................................... 78
8.1.4 Distribution of Documents to Consultants .......................................... 80
8.1.5 Policy Steering Group ......................................................................... 80
8.1.6 Project Steering Group ........................................................................ 81
8.1.7 Change of Core Personnel in the Consulting Team ............................. 82
8.2
Detail ................................................................................................................. 83
8.2.1 Introduction ......................................................................................... 83
8.2.2 Programme .......................................................................................... 83
8.2.3 Progress Reports .................................................................................. 83
8.2.4 Supervision, Checking and Reporting on Consultants ........................ 84
8.2.5 Payment of Fees .................................................................................. 84
8.2.6 Feasibility Reports ............................................................................... 84
8.2.7 Management during Design, Construction & Commissioning ........... 85
8.2.8 Variations to Consultancy Assignment ................................................ 87
8.2.9 Retrospective Approval of Variations .................................................. 88
8.2.10 Variations for Additional Services that are within the Approved
Scope of the Project ............................................................................. 88
9.
MODIFICATION TO AN AGREEMENT ..................................................................... 89
9.1
Need .................................................................................................................. 89
9.2
Submission to EACSB ...................................................................................... 89
9.3
Justification ....................................................................................................... 89
9.4
Negotiation and Execution................................................................................ 89
9.5
Novation............................................................................................................ 90
9.6
Change of Company Name ............................................................................... 90
9.7
Suspension or Termination ............................................................................... 90
10.
CONSULTANTS' PERFORMANCE ............................................................................ 92
10.1
General .............................................................................................................. 92
10.2
Consultants’ Performance Information System ................................................ 92
Revision No. 14 (October 2014)
CONTENTS
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Page
11.
CONCLUSION OF THE AGREEMENT ...................................................................... 93
11.1
Scope of Assignment Not to Be Exceeded ....................................................... 93
11.2
Summary of Steps to be Followed on Completion of an Agreement ............... 93
11.3
Completion of Agreement ................................................................................. 93
11.4
Letter of Completion ......................................................................................... 94
11.5
Technical Audit on Completed Contracts ......................................................... 94
11.6
Final Report on Completion of Agreement ....................................................... 94
11.7
Post-Completion Review on Major Consultancy Agreements ......................... 94
Revision No.14 (October 2014)
CONTENTS
FIGURES
Figure 3.1
Figure 3.2
Figure 3.3
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Page No.
Consultants Selection Procedures
Procedures for the Assessment of the Manpower
Attribute in Technical Proposals
Procedures for the Assessment of Fee Proposals
46
47
48
APPENDICES
Appendix 1.1
Supplementary Procedures for Selection, Appointment and
Administration of Engineering and Associated Consultants approved / to
be considered by DCSCs
Appendix 2.1
Consultant’s Profile Proforma
Appendix 2.2
Consultants’ Services Directory
Appendix 3.1
Sample Invitation Letter for Expression of Interest
Appendix 3.2
Sample Memo for Shortlisting Stage Submission to EACSB
Appendix 3.2A
Sample Memo for First Submission to EACSB before Invitation of
Technical and Fee Proposals (for One-stage Consultants Selection)
Appendix 3.3
Sample Notice of Inviting Expression of Interest through Internet
Appendix 3.3A
Sample Notice of Inviting Submission of Technical and Fee Proposals
through the Internet (for One-stage Consultants Selection)
Appendix 3.4
Sample Invitation Letter for Technical and Fee Proposals
Appendix 3.4A
Sample Invitation Letter for Technical and Fee Proposals (for One-stage
Consultants Selection)
Appendix 3.5
RSS Provisions to be added to Sample Fee Proforma
Appendix 3.6
Assessment Panel on Consultants Selection
Appendix 3.7
Sample Memo to Request for Release of Fee Proposals
Appendix 3.8
Sample Memo for Nomination Stage Submission to EACSB
Appendix 3.9
Standard Memo Notifying EACSB of Signing of Agreement
Appendix 3.10
Reference Procedures for One-stage Consultants Selection
Revision No.14 (October 2014)
CONTENTS
1-7
Appendix 3.11
Standard Form for Summary of Technical and Fee Proposals
Appendix 3.12
Standard Special Conditions of Employment: Disclosure of Fee Payable
to the Consultants
Appendix 3.13
Sample Fee Proforma
Appendix 3.13A
Suggested Categories of Staff for Services and Additional Services
Appendix 3.13B
Sample Fee Proforma for Time Charge Assignment
Appendix 3.14
Sample Summaries of Assessments
Appendix 3.15
Procedures in the Selection of Consultants for Small Consultancy
Assignments
Appendix 3.16
Worked Example of Technical and Fee Assessment of Consultants’ Bids
Appendix 3.17
Sample Letter to Bidders with Unreasonably Low Bids
Appendix 3.18
Feedback and Debriefing to Unsuccessful Bidders for Consultancy
Agreements
Appendix 4.1
Standard Forms of Memorandum of Agreement
Appendix 4.2
Standard Form of Schedule of Fees
Appendix 4.3
Guidelines on the Preparation of Briefs for Feasibility, Investigation,
Design and Construction Assignments
Appendix 4.4
Typical Format of the Brief for a Feasibility Assignment
Appendix 4.5
Typical Format of the Brief for an Investigation Assignment
Appendix 4.6
Typical Format of the Brief for a Design and Construction Assignment
Appendix 4.7
Standard Form of Design Certificate
Appendix 4.8
Sample Summary for Reimbursable Items Under Consultancy
Assignments
Appendix 4.9
Sample Report on Tenders for Reimbursable Items Under Consultancy
Assignments
Appendix 4.10
Standard Special Conditions of Employment: Interest on Overdue
Payment
Appendix 4.11
Standard Special Conditions of Employment: Approval of Major
Revisions to Approved Documents and Referral and Reporting by
Consultants of Variations, Claims and Delay in Works Contracts
Revision No.14 (October 2014)
CONTENTS
1-8
Appendix 4.12
Standard Special Conditions of Employment: Projects Implemented in
Phases
Appendix 4.13
Standard Special Conditions of Employment: Conflict of Interest and
Debarring
Appendix 4.14
Standard Special Conditions of Employment: Retention of Documents
and Inspection
Appendix 4.15
Standard Special Conditions of Employment: Retention of Money
Payable to Non-resident Consultants for Settlement of Profits Tax in
Consultancy Agreements
Appendix 4.16
Standard Special Conditions of Employment: Adaption to New
Arbitration Ordinance
Appendix 4.17
Standard Special Conditions of Employment: Professional Indemnity
Insurance
Appendix 5.1
Sample Hourly Rate Charge Calculation Sheet
Appendix 5.2
Consultants Remuneration – Fees Based on a Percentage Basis
(Applicable only to certain old ongoing agreements)
Appendix 5.3
Adjustment of Consultants’ Remuneration by the Civil Engineering
Works Index
(Applicable only to certain old ongoing agreements)
Appendix 6.1
[not used]
Appendix 6.2
[not used]
Appendix 6.3
[not used]
Appendix 6.4
Reference for Managing Department in Preparing the “Schedule of
Resident Site Staff Standards and Duties”
Appendix 7.1
Sample Letter to Successful Consultant
Appendix 8.1
General Range of Documents for Consultancy Agreements
Appendix 8.2
Change of Core Personnel in the Consulting Team
Appendix 11.1
Standard Form of Letter of Completion
Appendix 11.2
Post-completion Review on Major Consultancy Agreements Under
Public Works Programme
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1.
INTRODUCTION
1.1
Purpose of Handbook
Revision No. 13 (November 2013)
This Handbook is for the use and guidance of officers of departments which employ the
services of consultants in the engineering and associated fields for the study and
implementation of government projects. Officers using this Handbook are expected to
have acquired prior knowledge of the relevant Stores and Procurement Regulations
(SPR).
The Handbook is issued by the Engineering & Associated Consultants Selection Board
(EACSB) specifically for use with consultancy agreements which come within the
jurisdiction of the EACSB. It provides guidance on matters relating to the selection
and appointment of consultants, their terms and conditions of employment, and their
management (where appropriate) throughout an agreement.
This Handbook has been written so as to be comprehensive with regard to the selection,
appointment and administration of consultants. Its first issue of May 1999 took full
account of directives and guidance given in relevant Works Branch Technical Circulars
and Financial Circulars issued prior to June 1999, and it superseded EACSB Circulars
issued prior to June 1999. This Handbook is reviewed and updated annually to take
account of new Development Bureau (DEVB) Technical Circulars, Financial Circulars
and EACSB Circulars. It should be noted that this Handbook does not replace the
relevant DEVB Technical Circulars, Financial Circulars and EACSB Circulars. It
should also be noted that relevant new DEVB Technical Circulars, Financial Circulars
and EACSB Circulars may be issued from time to time prior to the next annual
updating, which may supersede the relevant contents of this Handbook. The managing
department should, in conjunction with the use of this Handbook, also refer to all the
relevant circulars issued after the latest annual update of the Handbook. These may be
found under “Useful Information/Administrative Handbooks & Manuals/EACSB
Handbook and Related Guidelines/Circular Memoranda” at the Works Group Intranet
Portal.
Anyone wishing to enquire about information relating to engineering and associated
consultants selection given in this Handbook may contact the EACSB Secretary in
writing c/o Civil Engineering and Development Department, 16/F Civil Engineering
and Development Building, 101 Princess Margaret Road, Ho Man Tin, Kowloon, or at
telephone number 2762 5018.
1.2
Need to Employ Consultants
Before a department approaches the EACSB, the need to employ a consultant must first
have been established and the necessary financial authority obtained.
There are two main reasons for the employment of consultants, namely :
(a) to supplement existing staffing resources :
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Revision No. 13 (November 2013)
(i)
to provide extra staff,
(ii)
to cope with fluctuating demand for resources, or
(iii) to accelerate time scales, and
(b) to provide a qualitative dimension not currently available :
(i)
to provide specialist expertise not available in the department,
(ii)
to provide an independent view on a particular project/problem, or
(iii) to facilitate a multi-disciplinary approach.
1.3
Authority to Employ Consultants
Agreement from the Head of Department (HoD) must first be given and policy support
from the relevant Director of Bureau or a public officer authorised by him (see SPR
410) must also be obtained, for the employment of consultants for a project.
1.4
Funding for Employment of Consultants
Managing Departments must ensure that all funding requirements for the employment
of consultants promulgated by Financial Services and the Treasury Bureau (FSTB) are
satisfied before proceeding with the consultants selection procedures (as promulgated
under SPR 415 and Financial Circular No. 2/2009). Submissions to the EACSB which
do not meet these requirements will be returned to the relevant department for
corrective action.
Under no circumstances may an agreement be entered into or extended until funds have
been approved for the agreement or for the extension.
1.5
Consultants Selection Board
Unless authority has been specifically delegated to departments and consultants
selection boards, the Permanent Secretary for Financial Services and the Treasury
(Treasury) (PS(Tsy)) is the approving authority for appointment of consultants for the
provision of consultancy services. The Financial Secretary (FS) / Secretary for
Financial Services and the Treasury (SFST) appoints the following selection boards to
advise on the selection and appointment of consultants for assignments with a value
exceeding the quotation limit stipulated in SPR 220(a) (see SPR 425):
(a) The Central Consultants Selection Board (CCSB) advises PS(Tsy) on the selection
and appointment of consultants, other than those selected and appointed by the
Architectural & Associated Consultants Selection Board, the Engineering &
Associated Consultants Selection Board and Departmental Consultants Selection
Committees (DCSCs).
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Revision No. 13 (November 2013)
(b) The Architectural & Associated Consultants Selection Board (AACSB) approves
the selection and appointment of architectural and associated consultants for
government projects other than those selected and appointed by DCSCs.
(c) The Engineering & Associated Consultants Selection Board (EACSB) approves the
selection and appointment of engineering and associated consultants for
government projects other than those selected and appointed by DCSCs. The main
client departments for consultancies in this category are the Civil Engineering and
Development Department, Drainage Services Department, Electrical & Mechanical
Services Department, Environmental Protection Department, Highways
Department, Planning Department, Transport Department and Water Supplies
Department.
For selection and appointment of engineering and associated consultants, the total
value of services as referred to in SPR 205 should include the estimated values or actual
values of lump sum fee, notional value for additional Services (or subsequent cost of
variations/claims of the consultants), on-cost for Resident Site Staff (RSS), inflations,
etc.
1.6
Departmental Consultants Selection Committees (DCSCs)
SPR 426 sets out the functions and formation of DCSCs appointed by the respective
Controlling Officers in their departments to approve the selection and appointment of
engineering and associated consultants for consultancy assignments up to $5 million.
Engineering and associated consultancy assignments beyond the quotation limit stated
in SPR 220(a) and approved / to be considered by DCSC should be regarded as also
under the purview of EACSB and comply with the same submission procedures (other
than the different approving authority), requirements on use of standard documents,
consultant administration procedures, performance assessment procedures and other
related requirements. Departments should, unless specified otherwise, follow the
relevant consultants selection procedures stipulated in SPR, this handbook, Financial
Circulars and DEVB Technical Circulars (Works), as appropriate. Under this situation,
any reference to EACSB made in this handbook should in general be regarded as
reference to DCSC. In addition, a set of supplementary procedures at Appendix 1.1
should be followed.
The delegation promulgated in SPR426 includes the authority to approve the list of
consulting firms for inviting consultancy proposals, consultancy briefs, marking
schemes for assessing consultancy proposals, pre-contract negotiations, appointment
of consultants and cancellation of consultants selection exercise. Notwithstanding this
delegation when the financial limit of $5 million is not exceeded, the following special
cases still warrant submissions to EACSB for approval, in order to better ensure
consistent treatment among departments.
(a) Shortlisting stage (Stage 1) submissions where (i)
less than three consultants are shortlisted;
(ii)
one-stage selection process for special cases as mentioned in Section 3.1.3.1;
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Revision No. 14 (October 2014)
(iii) the total value of reimbursable items exceeds $1.3 million or 20% of the
estimated lump sum fee of the Agreement (See Section 4.11.3(a)); or
(iv) a deviation from any of the following standard guidelines in EACSB
Handbook/Technical Circular in respect of
-
the marking scheme stipulated in DEVB TCW No. 1/2014;
-
the technical/consultancy fee/fee quality weightings recommended in
Section 3.11.2; or
-
the requirements on payment schedules as stipulated in Section 4.6.1.
(b) Nomination stage (Stage 2) submissions where (i)
only one conforming consultancy proposal is available for consideration of
award;
(ii)
rejection of the most advantageous bid as determined by the method of
assessment at Appendix 3.16 is recommended;
(iii) acceptance of an alternative technical proposal is recommended (Section
3.1.4 refers);
(iv) notional value for additional Services exceeds 10% of Lump Sum Fee
(Section 3.11.3 refers); or
(v)
the Stage 1 submission for the Agreement has been approved by EACSB.
(c) Other submissions where
(i)
a Longlist of less than 10 consultants is adopted for one-stage consultants
selection (Section 3.1.3.1 refers);
(ii)
direct selection of consultants for fee negotiation or for their subsequent
appointment is involved (Sections 3.1.5 and 3.15 refer);
(iii) the delegated authority of DCSC to approve variations as stipulated in the
SPR will be exceeded or the variations are outside the approved scope of the
consultancy assignment (Section 3.17 refers); or
(iv) approval is sought for invitation of tenders or report on tenders on
reimbursable item of value exceeding $5million (Section 4.11.3 & Appendix
4.9 refer).
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Revision No. 14 (October 2014)
For the above special cases, departments should make a self-explanatory submission to
EACSB. If there are submissions previously approved by DCSCs for the same
agreement, requirements of submissions in Section 3.12(g) should be followed.
Under other special cases where there will be general implications to other
consultancies, or where the existing rules/guidelines do not apply, departments may,
upon DCSC’s advice, seek EACSB’s approval. The reasons for seeking such approval
and DCSC’s advice should be detailed in the submission to EACSB.
1.7
Consultancy Assignments with Fees Not Exceeding the Quotation Limit
For the procurement of engineering and associated consultancy services not exceeding
the quotation limit set out in SPR 220(a), approval of the DCSC is not required.
The procedures laid down in Chapter II of SPR and the relevant DEVB Technical
Circulars (Works) (in particular, DEVB TCW No. 3/2013 on small consultancy
procurement procedures) should be followed. Alternatively, if Controlling Officers
prefer, consultants selection procedures in Chapter IV of SPR could be followed.
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Revision No. 13 (November 2013)
2.
ENGINEERING AND ASSOCIATED CONSULTANTS SELECTION BOARD
2.1
Composition of EACSB
The Chairman and Members are appointed by FS / SFST. The up-to-date information
on the membership and terms of reference (as in Section 2.2 below) of the EACSB is
published in the current issue of the Civil and Miscellaneous Lists of the Government
of the Hong Kong Special Administrative Region.
Chairman :
Members :
Director of Civil Engineering and Development
(a) Deputy Secretary for Financial Services and the Treasury
(Treasury)3 or Principal Assistant Secretary for Financial
Services and the Treasury (Treasury)(Works)
(b) Deputy Secretary for Development (Works)2 or Principal
Assistant Secretary for Development
Secretary :
Senior Engineer/EACSB, Civil Engineering and Development
Department
In attendance : A representative (at D2 rank or above) of the Department concerned
for a particular submission.
2.2
Terms of Reference of EACSB
The terms of reference of the EACSB are :
(a) to approve the selection and appointment of engineering and associated consultants
for government projects other than those selected and appointed by DCSCs;
(b) to advise the Secretary for Development (SDEV) on selection procedures,
conditions of employment and remuneration of engineering and associated
consultants and to recommend changes as necessary;
(c) to promulgate guidelines on selection and appointment procedures approved by the
EACSB; and
(d) to review the performance of engineering and associated consultants.
It should be noted that, the EACSB's jurisdiction covers consultancies in the following
fields:
civil engineering, geotechnical engineering, structural engineering (excluding
Architectural Services Department), mechanical engineering, electrical
engineering and electronics, development, planning, transportation, water
resources, environmental planning and engineering, and chemical engineering.
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2.3
Revision No. 13 (November 2013)
EACSB Administrative Structure
The EACSB's authority is derived from FS / SFST as set out in the SPR. Policy relating
to the selection, appointment, remuneration and administration of engineering and
associated consultants lies with the SDEV. Established policy on the selection,
appointment and remuneration is implemented through the EACSB.
The administrative structure within which the EACSB operates as promulgated
originally under WBTC No. 16/91 has generally been subsumed hereunder and
archived. In addition to the EACSB itself, there are two other related Standing
Committees involved in related policy development, namely:
(a) Consulting Engineers' Committee (CEC); and
(b) Consultancy Agreements Committee (CAC).
2.4
Consulting Engineers' Committee
The Consulting Engineers' Committee (CEC), which is chaired by the Permanent
Secretary for Development (Works), provides a means for regular liaison between the
Government and the Association of Consulting Engineers of Hong Kong (ACEHK) on
matters relating to the employment of engineering and associated consultants.
2.5
Consultancy Agreements Committee
Formerly known as the Engineering Consultancy Agreements Committee (ECAC), the
Committee is originally established as an in-house standing committee with the main
task of keeping under review the related consultancy agreement documents including
the forms of agreement, conditions of employment and schedules of fees, etc.
At its meeting held on 9 October 2003, the then ECAC agreed to be renamed as the
Consultancy Agreements Committee (CAC). Chaired by the Deputy Secretary for
Development (Works)2, the CAC is a government committee which deals with matters
relating to the appointment and administration of engineering and associated
consultants.
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2.6
Revision No. 14 (October 2014)
EACSB Information
Information on engineering and associated consultants is compiled and kept by the
EACSB Secretariat. The following central records, being classified as Restricted
(Contract), are maintained:
(a) Consultants’ Services Directory which contains the names and addresses of
consulting firms that have expressed an interest in working for the Government of
the Hong Kong Special Administrative Region on a consultancy basis, who provide
services in the engineering and associated fields, and who have completed a
standard "EACSB Consultant's Profile" form (see Appendix 2.1). The Directory
lists each firm alphabetically, giving fields of declared interest/expertise and also
lists firm's staff resources for each discipline. The consulting firms should provide
updated Profiles to the Secretariat if there are any changes. The Secretariat may
from time to time require a consulting firm to verify its own information that was
found incorrect or dubious. In case that the clarification/ response provided by the
consulting firm is not satisfactory or not within the specified deadline, the
information of a consulting firm will be removed from the Directory.
It is stressed that the Directory confers no status on the firms listed. The Directory
is neither a registration list nor an approved list of consultants. The function of the
Directory is similar to that of the “Yellow Pages to Consumers”. The information
provided by the consulting firms is not vetted. The Directory only serves as a
source of information in addition to departments’ other suitable sources of potential
consultants. Selection of consultants should not be restricted to the firms in the
Directory. All consulting firms having the potential to provide the services should
be considered. A sample form of the Directory is given at Appendix 2.2.
(b) Profiles on Consultants as submitted and updated by the consulting firms contain
information from which the Directory is compiled.
(c) Record of Approved Consultancy Agreements, which lists all active agreements
approved by the EACSB or DCSCs, is used by the EACSB and DCSCs for
reference.
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Revision No. 14 (October 2014)
3.
PROCEDURES FOR SELECTION AND ENGAGEMENT OF CONSULTANTS
3.1
Outline of the System
3.1.1
Fee Competition Element
As originally promulgated under WBTCs Nos. 16/95, 16/95A and ETWB TCW No.
16/95B the relevant content of which has now been subsumed in this Handbook, the
Government’s current system for the selection and remuneration of engineering and
associated consultants provides for an element of fee competition in the selection
process and aims, as far as possible, to base the remuneration of consultants on a fixed
lump sum fee independent of the cost of the works.
3.1.2
Selection
The selection of consultants for all consultancies, including Feasibility Study,
Investigation, Design and Construction (D & C), is determined on the basis of
assessment of technical merit combined with proposed consultancy fees. Consulting
firms are required to submit, in separate sealed envelopes, both a Technical Proposal
and a Fee Proposal.
The Fee Proposals are opened for assessment after assessment of Technical Proposals
using a pre-determined marking scheme. On the basis of a pre-determined system of
evaluation and weighting, the Fee Proposals are then combined with the technical
assessment to determine which consultant should be awarded the consultancy.
As originally promulgated under ETWB TCW No. 16/95B in the situation where the
scope of design and construction services for a D & C project cannot be adequately
defined until the Investigation stage has been carried out, the project should be split
into two separate consultancies - one for investigation services and the other for design
and construction services. Submissions for the D & C consultancy should be invited
only after the scope of design and construction services has been adequately defined in
the Investigation consultancy to enable consultants to submit competitive lump sum
Fee Proposals.
In the situation where the full scope of investigation, design and construction (IDC)
services can be adequately defined at the start for the purposes of inviting competitive
lump sum Fee Proposals, the use of single IDC consultancies is encouraged to expedite
project delivery. In these cases, the Controlling Officer should be satisfied that the
risks of major scope changes following the Investigation stage are low, and that it is
appropriate to invite bids on lump sum basis. Such Controlling Officer's satisfaction
with the use of IDC arrangement should be clearly indicated in the EACSB submission,
under the heading "Background/Argument" (see Section 3.3.1).
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Revision No. 14 (October 2014)
Stages of Selection
Selection of a consultant for a consultancy can either be through a one-stage or a two
stage process.
3.1.3.1 One-stage Selection
To streamline the procurement procedures, as promulgated in June 2013 under
Financial Circular No. 4/2013, Expression of Interest (EOI) is not a mandatory
requirement. Under this one-stage selection, each consulting firm should be asked to
declare in their submissions any involvement or interest as described in Section 3.5.3.
The Assessment Panel may agree to invite technical and fee proposals directly from a
Longlist of consulting firms for suitable assignments, if it is considered in the best
interest of the Government having regard to:(i)
the factors as mentioned in SPR 440(b); and
(ii)
resource implications to the consultants for preparing technical proposals for
complex consultancies and to the departments themselves in assessing more
technical proposals when EOI is not adopted.
For assignments for projects with estimated value exceeding $1,000 million and
adopting a 72%/18%/10% technical/consultancy fee/fee quality weighting, the
Assessment Panel should obtain HoD’s approval to adopt one-stage consultant
selection process and the HoD should personally be satisfied that the one-stage
selection process is suitable for the consultancy concerned.
Drawing reference to experience gained through simplified one stage consultants
selection process since 2008 (DEVB’s memos of reference (01QKC-01-9) in
DEVB(PS) 106/43 dated 8 April 2008 and (021QS-01-6) in DEVB(PS) 106/43 dated
13 July 2009) and considering the inflation in the intervening period, the following
assignments are generally suitable for adoption of the one-stage selection subject to the
considerations given in the first paragraph in Section 3.1.3.1:(a)
Assignments of values (lump sum fee or time charge ceiling) not exceeding $5
million and adopting a 63%/27%/10% technical/consultancy fee/fee quality
weighting or lower; and
(b)
Assignments of values not exceeding $9 million of the following specific types
of consultancies where considerable number of consulting firms with long
history of relevant and proven experience in similar consultancy assignments
are available and adopting a 63%/27%/10% technical/ consultancy fee/fee
quality weighting or lower :
(i) Landslip prevention and mitigation(LPMit) projects;
(ii) Road reconstruction and minor improvement projects;
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Revision No. 14 (October 2014)
(iii) Waterworks projects; and
(iv) Drainage and sewerage improvement projects.
In general, one-stage selection should not be applied to those consultancies adopting
small consultancy procurement procedures, because of the lack of certainty to have
adequate number of qualified consultants to submit Technical and Fee Proposals.
The reference procedures for the one-stage consultant selection process are given at
Appendix 3.10.
There are special cases of one-stage selection. In cases where there is a very narrow
field of potential consultants or a genuine need to shorten the consultants selection
process, there might be justification for inviting Technical and Fee Proposals from
normally four consultants, instead of a longlist of consultants. Normally, under these
circumstances, Technical and Fee Proposals will be invited by letters rather than both
by letters and through the internet (subject to approval of EACSB as referred to in Item
(a)(ii) of Section 1.6). Also, if there is sufficient justification, the EACSB may agree to
negotiation of the D & C consultancy exclusively with the Investigation stage
consultant.
3.1.3.2 Two-stage Selection
A two-stage selection comprises longlisting (see Section 3.5) and shortlisting (see
Section 3.6).
3.1.4
Alternative Technical Proposal
On occasion, the managing department may receive from a shortlisted consultant an
alternative Technical Proposal in addition to a conforming Technical Proposal. In such
a case, if, in the opinion of the managing department, acceptance of the alternative
Technical Proposal, even taking the corresponding fee into account, will clearly be
advantageous to Government, then the managing department may make a
fully-justified case to the EACSB to recommend adoption of the alternative Technical
Proposal and appointment of the consultant. Such a recommendation should only be
made on condition that the consultant has submitted, in addition to the alternative
Technical Proposal, Technical and Fee Proposals in conformity with the requirements
of the Brief and standard Fee Proforma, and that the Fee Proposal for the alternative
Technical Proposal is also in conformity with the standard Fee Proforma. Negotiation
of the fee is not permitted.
3.1.5
Direct Selection
The EACSB may, in very exceptional circumstances, agree to the direct selection of a
consultant for a consultancy. In such event, all fee packages should be negotiated as far
as possible as a lump sum fee not expressed in terms of the final costs of the works.
Circumstances warranting direct selection of a single consultant are set out in Section
3.15.
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3.1.6
Revision No. 13 (November 2013)
Agreements Based on Time-charges
If it is not feasible to invite competitive lump sum Fee Proposals for a consultancy, the
EACSB may agree to inviting competitive Fee Proposals based on time-charges.
3.1.7
Exceptional Procedures
Justification for adoption of any of the exceptional procedures mentioned in Sections
3.1.3.1, 3.1.4 to 3.1.6 above must be fully documented in the submission to the
EACSB.
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3.2
Revision No. 14 (October 2014)
Types of Submission to the EACSB
The most common types of submission to the EACSB are for :
(a) shortlisting stage - recommendation of a Shortlist of suitable consultants (Stage 1
submission); followed by
(b) nomination stage - recommendation of a preferred consultant (Stage 2 submission);
or
(c) recommendation of the direct selection of a consultant for fee negotiation; followed
by
(d) recommendation of the appointment of a directly-selected consultant (nomination
stage);
(e) request for approval for variations to consultancy agreements/additional Services;
and
(f) request for approval for cancelling the consultant selection exercise (see SPR 470)
If the managing department have any other issues that require the EACSB’s
consideration, they should submit a self-contained EACSB paper with all relevant
details following the general format outlined in Section 3.3.1 and Appendices 3.2, 3.2A
or 3.8 as appropriate. The managing department should not simply copy documents to
the EACSB or its Secretariat and assume the EACSB would consider any relevant issue
automatically.
3.3
Details of Submissions
3.3.1
General Format of Submissions to the EACSB
All submissions should be made by the HoD, or an officer of D2 rank or above on
behalf of the HoD. All submissions should be addressed to Chairman, EACSB
(through Secretary, EACSB), copied to DS(Tsy)3, FSTB and DS(W)2, DEVB and
should include all relevant information which should be self-contained in each
submission under the following headings :
(a) Consultancy Agreement No. and Title;
(b) Authority to Employ Consultants (provide details of Public Works Programme
(PWP) Item No. & title, together with estimated fee, estimated manpower input and
source and confirmation of approved funding);
(c) Approval Requested;
(d) Previous Submissions to the EACSB / DCSC (if applicable) (in tabulated form)
regardless of whether approval was given as requested;
(e) Background/Argument (provide full justification for the recommendations and the
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Revision No. 14 (October 2014)
adoption of exceptional procedures, if any); and
(f) Attachments, e.g. Brief; any non-standard Special Conditions of Employment
(SCE); Schedule of Fees; Fee Proforma; details of the Assessment Panel, marking
scheme and score summary; a breakdown of fees, etc.
The managing department should ensure that all standard documents such as Brief,
Schedule of Fees, Fee Proforma and marking scheme etc., conform to the standard
requirements of relevant circulars and the EACSB Handbook. The EACSB will only
examine in principle the documents and advise the managing department to address
any obvious shortcomings. If the managing department consider it necessary to deviate
from the standard requirements of the Handbook, then they should highlight under
"Background/Argument" in the submission, any deviations together with full
justification, that require the EACSB’s attention. Details should be provided in the
attachments.
Submissions which do not conform to the above should be returned to the managing
department for corrective action and subsequent re-submission.
EACSB submissions should be precise and concise. Only documents that require the
EACSB’s attention according to the EACSB Handbook should be included.
Documents such as repetitive information; correspondence between the managing
department and consultants; revised draft brief; individual Assessment Panel members’
score sheets; General Conditions of Employment (GCE) etc., should not be attached.
EACSB submissions should be printed on double sides as far as practicable.
3.3.2
EACSB Meetings and Deadline for Submissions
Normally, the EACSB meets on a Friday morning, twice each month, unless notified
by the Secretary, EACSB to the contrary. The Secretary, EACSB will notify
departments the schedule of EACSB meetings once a year, and will arrange to upload
the schedule to the DEVB Works Group Intranet Portal (under “Useful
Information/Administrative Handbooks & Manuals/EACSB Handbook and Relevant
Guidelines/Circular Memoranda”).
The deadline for receipt of submissions by the Secretary, EACSB is 17:00 hours, one
week prior to the particular meeting unless otherwise notified by the Secretary,
EACSB. Copies to DS(W)2, DEVB and DS(Tsy)3, FSTB should also reach the copy
addressees by the same deadline. Late submission will not be accepted. In exceptional
circumstances, late submissions may be considered at the Chairman's discretion. The
late submission must be accompanied with a written justification requested by the HoD
in such circumstances for urgent consideration by the Chairman.
3.3.3
Submissions for EACSB’s Consideration by Circulation
Exceptionally, papers for urgent consideration, or which cover minor matters in
relation to consultancy agreements, may be considered by circulation.
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Revision No. 14 (October 2014)
As stipulated in the then S for W's memorandum ref. (46) in WB(PS) 106/44 dated 24
April 2002, in order to expedite the approving process, the provision of consideration
by circulation is extended to Stage 2 submissions (i.e. request for approval of a
recommended consultant).
It must be indicated that the paper is for the EACSB’s consideration by circulation,
must be copied to DS(Tsy)3, FSTB and DS(W)2, DEVB, and must include reasons
why consideration is required ahead of the normal EACSB meeting.
Papers will be considered “by circulation” at the EACSB's discretion and only if
adequate justification for urgent consideration is included.
3.4
Pre-submission Procedures
3.4.1
Preliminary Steps
Before the EACSB is approached for the approval of a proposal, the managing
department must have :
(a) identified the need and obtained (i) policy support from the relevant Director of
Bureau or a public officer authorised by him for the employment of consultants, and
obtained funds for employing consultants, or (ii) approval under delegated
authority to proceed with consultants selection, prior to the availability of funding;
(b) defined the scope of the project, including order of cost, estimate of time for
completing the consultancy Agreement, estimate of fees with due reference to the
prevailing market prices and any other relevant information, and estimate of
manpower input required;
(c) prepared a preliminary draft Brief;
(d) obtained a consultancy Agreement number from the EACSB Secretariat;
(e) convened an Assessment Panel; and
(f) identified an initial list of consultants with the necessary expertise.
3.4.2
Allocation of Agreement Number
After obtaining approval and policy support to employ consultants and prior to
proceeding with the consultants selection process, the managing department should
approach the EACSB Secretariat for the allocation of an Agreement number. This may
be done by phoning up Engineer/EACSB at 2762 5173 in the first instance, and
confirmed in writing by the managing department.
DEVB TCW No. 1/2014, Annex I, paragraph 18, stipulates that regarding the taking of
regulating actions, consultancies are to be categorised such that the suspension of
consultants from bidding due to adverse performance will generally be confined to the
category concerned. Details of the categories are as follows :
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Revision No. 14 (October 2014)
Category
CE
DS
EM
EP
GE
HY
TP
TT
WS
SP
Civil infrastructure and development
Drainage and sewerage
Electrical and mechanical
Environmental
Geotechnical and slope
Roads and associated structures
Town planning
Traffic and transport
Waterworks
Specialists
The category should be indicated in bracket in the agreement number. For example, the
agreement number should read CE 93/2001 (HY) if the category of the agreement is
“Roads and associated structures”. The managing department should indicate the
category when obtaining the agreement number.
The Agreement title should be concise and accurately reflect the nature of Services and
type of Agreement, conforming to the following format :
[Brief title] – [type of Agreement]
e.g. Penny’s Bay Reclamation – Design and Construction
The type of Agreement should follow the standard description (see Section 4.1), i.e.
“Feasibility Study”, “Investigation” or “Design and Construction”.
3.4.3
Assessment Panel
An Assessment Panel, normally comprising three to five marking members, depending
on the size and nature of the project, should be established at the longlisting stage to
assess consultants. The Assessment Panel should be chaired by an officer ranked
preferably at D2, but not lower than D1, and comprise members of not lower than a
senior professional level from appropriate government departments. Non-marking
officers, if any, except the Chairperson and/or the Secretary, should not participate in
Assessment Panel meetings. Details on the functions, setting up and operation of the
Assessment Panel are given at Appendix 3.6.
3.4.4
Avoidance of Conflicts with Private Interest
SPR 186 states that departments must state in each tender report whether or not the
officers involved in preparing tender documentation (including tender specifications
and marking schemes), assessing tenders and conducting negotiations have declared
their interest and, where conflicts of interest (actual, potential or perceived) have been
identified, what remedial action has been taken. To meet the requirements under SPR
186, managing departments are required to state, where appropriate, in each EACSB
submission, including the shortlisting stage submission (Stage 1), the nomination stage
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Revision No. 14 (October 2014)
submission (Stage 2) and the first submission to EACSB before invitation of technical
and fee proposals (for one-stage consultant selection), whether (i) all officers involved
in preparing consultancy documentation (including consultancy briefs and marking
schemes), and assessment for the shortlisting exercise; and (ii) members of Assessment
Panel, have declared their interest in accordance with SPR 186 and in the case where
conflict of interest (actual, potential or perceived) has been identified, indicate the
remedial action taken. Such statements should be highlighted under the heading
“Background/Argument” of the submission.
3.5
Longlisting of Consultants
3.5.1
Consultants’ Information
The Assessment Panel should select suitable consultants from all reasonably available
sources to form the Longlist based on the agreed selection criteria and marking system.
All available information should be used for forming the Longlist, with usually 15-20
consultants depending on the nature of the Services involved.
3.5.2
Selection Criteria
The criteria for screening the Longlist to form the Shortlist will vary depending on the
nature of the assignment. These criteria must be determined by the Assessment Panel.
In shortlisting consultants at EOI stage, departments should refer to the selection
criteria as set out at Appendix F of DEVB TCW No. 1/2014 (summarised below) as a
guide :
(a)
Appreciation of the key requirements and constraints / risks
5-10%
(b)
Approach and strategy to meet the requirements of the 20-40%
assignment (departments may include sub-criteria where
appropriate, to cover the consultants’ approach and strategy on
innovation, creativity, mechanisation, prefabrication, other
productivity enhancements, cost reduction, expenditure leveling,
etc.)
(c)
Previous relevant experience both in Hong Kong and elsewhere
5-10%
(d)
Knowledge, experience and capability of key staff
35-45%
(e)
Past performance of the consultant
10-20%
(f)
Past performance of sub-consultants
0-10%
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Revision No. 14 (October 2014)
Other than criterion (b), the above criteria should not be sub-divided. Each panel
member should grade each criterion, except past performance (which should normally
be marked using the Consultant’s Past Performance Ratings in accordance with DEVB
TCW No. 1/2014), for the marking of the EOI submission as either “Very Good”,
“Good”, “Fair” or “Poor”. The marks that should correspond to these grades are:
100%, 80%, 60% and 30%, respectively. Criteria (a) should be assessed based on the
Consultant’s appreciation of key requirements and constraints/risks additional to those
set out in the brief. If no additional appreciation is included, a “fair” grading at most
should be given. For criterion (b), Consultants’ detailed proposals are not expected and
should not be assessed in the shortlisting stage but consultants are encouraged to
indicate their broad approach and strategy, particularly on innovative ideas,
productivity enhancements, cost savings which may demonstrate their edge in
undertaking the assignment.
The Assessment Panel should include a separate agenda item to discuss widely differed
marks (marks differing by two grades or more). Such discussion on why marks have
been so different and conclusions of the discussion (e.g. whether or not marks have
been adjusted following the discussion and the reasons for any mark adjustment; why
diverged views/marks have been considered acceptable) should be properly recorded in
the minutes indicating clearly the marking members concerned. In circumstances
where a certain criterion has been assessed by members as “Poor” or giving negative
comments, the Panel’s conclusion/view as to why the consultant is still considered
capable of undertaking the assignment despite such rather negative assessment result
should be clearly addressed and recorded in the minutes.
In order to render widely differed marks to be easily and readily spotted, the marking
on criteria (a) to (c) above should be presented as either “VG”, “G”, “F” or “P” as the
case may be instead of the actual marks for each criterion, in the summary of
assessment of EOI. A standard form to present the summary is given at Appendix
3.14.
A unified approach for rounding marks on assessment of EOI and Technical Proposal,
as promulgated in SDEV’s memorandum ref.( ) in DEVB(W)546/84/01 dated 27
January 2010, should be adopted. Under the unified approach, there should be “no
rounding” of figures throughout the marking process. For the avoidance of doubt, “no
rounding” means the whole number including all digits to the right of a decimal
separator should be employed for calculation purposes. The level of precision
recommended is eight decimal places. Procuring departments may choose to adopt a
different precision level if so justified. As regards presentation in hard copy form (e.g.
marking sheet), all figures should normally be “shown” in two decimal places
according to the following rule : “round” up the third decimal place if it equals to or
exceeds 5 and “round” down if it is below 5. Procuring departments should choose to
adopt more decimal places if so justified, e.g. in comparing the final scores. For
instance, the final scores of two bidders of 88.88440000 and 88.88450000 should be
shown as 88.884 and 88.885 respectively.
For consultants selection where the Assessment Panel consider that “past performance
of sub-consultants” should also be one of the assessment criteria in the Technical
Assessment, the practices as set out in paragraphs 36 to 38 of Annex I to DEVB TCW
No. 1/2014 should be followed prior to inviting EOIs, when adopted.
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Revision No. 14 (October 2014)
Invitation for Expression of Interest
Subject to the agreement of the Assessment Panel, the procuring department should
send an invitation letter (a sample is given at Appendix 3.1) to those consultants on the
Longlist requesting them to express an interest in being considered for the consultancy.
The invitation should include a description of the consultancy, the draft Brief, the draft
Schedule of Fees, other information sufficient for the consultants to prepare their
submissions, the deadline for submission and the requirements of submission.
Consultants should be requested to limit their replies to a maximum of six A4 pages.
No attachments whatsoever should be included, except for the curriculum vitae of the
key staff likely to be employed on the consultancy and the organization chart of the
study/project team. Late submissions or submissions that do not conform to the
requirements, such as the number of pages, the page size, the font size, and the content
attachments, shall not be considered. Each consultant shall also be asked to declare any
involvement or interest if it is considered by itself to be in actual, apparent, potential or
perceived conflict with the duties to be performed upon its appointment for the
consultancy. Any involvement or interest declared should be carefully considered but
should not automatically bar the consultant from being further considered in the
selection process. The managing department should seek confirmation from the
longlisted consultants who are limited liability companies that majority of the voting
power in meetings of the company is held by directors who are consulting engineers (or
equivalent professionals of associated professions) (see Section 7.2).
To provide consultants with the opportunity to form Joint Ventures, the invitation letter
should also include the names of all firms that are being approached.
As stipulated in the then SETW’s memorandum ref. (00ZD3-03-1) in ETWB(PS)
106/43 dated 30 March 2006, consultants having linkages to each other, e.g. being
subsidiaries, parent or sister companies are not allowed to bid on the same agreement.
Only one firm of such consultants should be invited under an agreement. Consultants
invited to submit EOIs are required to declare any linkage with other consultants on the
longlist. The same rule should apply to all consultants irrespective of the background
of their organisations, e.g. traditional consulting firms, academic institutions, etc., and
this should be made clear in the letter inviting EOIs (see Appendix 3.1). However, the
“no linkage” rule does not apply to “linked” consulting firms (including academic
institutions) who bid as sub-consultants only for an agreement.
To facilitate consultants’ better understanding of the history/status of the project and
hence provide better submissions, copies of relevant study reports should be made
available to all potential bidders. For environmental friendliness, electronic copies
should be preferred.
3.5.4
Open Invitation for Expression of Interest
In addition to the above arrangement of inviting EOIs from longlisted consultants, a
notice of inviting expression of interest should also be posted on the website of the
managing department. The Notice should contain the original invitation letter for
EOIs with the first two paragraphs of the letter replaced by the statements given at
Appendix 3.3. The Notice should be posted on the website by the time invitation
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Revision No. 14 (October 2014)
letters are sent to the longlisted consultants. Under this arrangement, other potential
consultants can also submit EOIs if they wish. Any amendment made during the EOI
period should be notified to the longlisted consultants as well as posted on the website
as soon as possible.
The Assessment Panel should screen out those consultants not meeting the longlisting
criteria prior to assessing the EOI submissions received.
3.6
Shortlisting of consultants
3.6.1
Forming of the Shortlist
From the EOIs received, a recommended Shortlist of normally four suitable consultants
should then be prepared based on the outcome of the assessment carried out by the
Assessment Panel.
3.6.2
Stage 1 EACSB Submission (Shortlisting Stage)
The EACSB Submission should include :
(a) background and scope of project, project estimate, fee estimate, manpower input
estimate, estimate of any reimbursable items, details and confirmation of approved
funding, breakdown of estimate of consultant’s fee as enclosed in the approved
funding paper;
(b) brief report on the longlisting of firms including the longlisting criteria used by the
Assessment Panel and the response to open invitation of EOI;
(c) an assessment of firms, including the shortlisting criteria used and marking scheme,
as given at Appendix 3.14 (also note the unified approach for rounding marks
given in Section 3.5.2) and minutes of the Assessment Panel meeting(s);
(d) recommendation of a Shortlist of consultants and the list of proposed
sub-consultants;
(e) reasons for selecting the Shortlist of firms, taking into account any involvement or
interest declared and considerations of the Assessment Panel as to the suitability of
any of the firms despite individual negative comments/ratings or relatively low
gradings as the case may be;
(f) reasons for rejecting those consultants that are not considered suitable for the
Shortlist;
(g) statements to the effect that the issue of SPR 186 has been fully addressed;
(h) proposed non-standard SCE, if any, with policy and legal clearance as appropriate;
(i) a draft Brief;
(j) Schedule of Fees, including payment schedule;
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Revision No. 14 (October 2014)
(k) marking scheme for Technical Proposals;
(l) proforma for the presentation of Fee Proposals;
(m) proposed technical/consultancy fee/fee quality weighting;
(n) proposed Notional Value for additional Services (covering contingency and
designated Services of unknown quantity e.g. site investigation supervision);
(o) proposed Notional number of man-hours for additional Services for each of the
posts to be used for assessment of the adjusted Notional Value for additional
Services based on all-inclusive charge rates;
(p) proposed Notional number of man-months of RSS, where appropriate, to be used
for assessment of RSS on-cost charges;
(q) Proposed weightings of staff composition, maximum of percentages of cross-grade
assignment of work, efficiency ratio and specified percentage range;
(r) name, post and contact telephone and fax numbers of the officer who will attend the
EACSB meeting when so directed by the Chairman.
A sample submission is given at Appendix 3.2.
After the EACSB's approval of a Shortlist, the unsuccessful consultants should be
notified promptly, and the shortlisted consultants should be invited to submit both
Technical Proposals and Fee Proposals.
3.7
Marking Scheme for Technical Proposals
DEVB TCW No. 1/2014 stipulates guidelines on preparation of technical proposals
and marking schemes.
Except as specified otherwise in the circular, each Technical Proposal should be
marked according to the quality of its own against the required standard and selection
criteria pre-determined by the managing department and agreed by the Assessment
Panel, not according to a relative comparison with other Technical Proposals.
The marking scheme for Technical Proposals should be subject to approval by the
EACSB prior to inviting submissions. The consultants should be informed of the marks
allocated to each of the main sections of the Technical Proposal.
The consultants should demonstrate in the Technical Proposal the will to achieve total
project cost-effectiveness, and that he has the skills, resources and proven experience to
do so. Accordingly, a mark must be assigned to “cost-effectiveness” wherever possible.
It should be noted, however, that “cost-effectiveness” relates to a consultant’s ability to
propose cost-effective solutions and is in no way related to the consultant’s fee
proposal. There may be some consultancies for which “cost-effectiveness” is not
meaningful. In such cases, the managing department should not allocate a mark for
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Revision No. 14 (October 2014)
“cost-effectiveness”. The Assessment Panel’s deliberation in this regard should be
recorded in the minutes, and accordingly presented in the submission.
In addition, to promote new design concepts and innovative ideas, the consultants
should include in the Technical Proposal its proposed approach and strategy in this
regard. The procuring departments should allocate marks following the guidelines set
out in Appendix F of DEVB TCW No. 1/2014.
As stipulated in DEVB TCW No.1/2014, the marking scheme should include a
criterion on "adequacy of professional and technical manpower input" carrying 5% 10% of the overall mark. The consultants will be required to submit in the Technical
Proposals their manpower input under six categories of staff, viz. partners/directors,
chief professional, senior professional, professional, assistant professional and
technical staff. In assessing the proposed manpower input to properly account for
different staff compositions proposed amongst the technical proposals, different
weightings will be applied to these staff categories, reflecting their relative level of
experience. Reasonable amount of work can also be assigned cross-grade between
professional and technical staff where appropriate and should be considered in the
assessment accordingly. In accordance with Annex A to DEVB TCW No. 6/2013,
grades for the overall manpower attribute are as follows:
Weighted Average Manpower Input of all
staff for the Tender under Assessment over
the Medians’ Weighted Average
> 100%
> 80% and ≤ 100%
> 60% and ≤ 80%
≤ 60%
Grading for the Overall
Manpower Attribute
Very Good (VG)
Good (G)
Fair (F)
Poor (P)
Subject to cross-grade working as allowed above, the weighted average professional
and technical inputs of a technical proposal should both be over 60% of the respective
medians’ weighted averages, failing which a “Poor” grade should be given, irrespective
of the above grading for the overall manpower attribute. Notwithstanding this, the
cross-grade working will not be allowed to improve the grading as assessed before.
Manpower Input Estimate
The procuring department should establish the staff categories, and estimate the
manpower input and lump sum fee having regard to the scope and nature of
assignment, project conditions, service requirements as well as the applicable rates of
similar consultancies and prevailing market rates where appropriate.
A proper manpower input estimate by procuring department is important to the
assessment. For the procurement of consultancy services using a two-stage approach,
an opportunity exists before invitation of Technical and Fee Proposals for the procuring
department to determine this estimate with regard to the shortlisted consultants’ and
their proposed staff’s general level of project experience/acquaintance. This can avoid
any over/under-estimation of the required manpower input for better assessment of the
shortlisted consultants’ Technical and Fee Proposals. Otherwise, the procuring
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Revision No. 14 (October 2014)
department’s manpower input estimate, which can be speculated from the “notional
man-hours for additional Services”, may drive the shortlisted consultants to artificially
adjust their proposed manpower input in the Technical and Fee Proposals in order to
secure a higher winning chance.
Weighting of Staff Composition
For assessing the relative importance of the experience of staff in a manpower
proposal, the procuring department should determine specific weightings of staff
composition taking into account the nature, complexity and other circumstances of the
assignment. In assessing the manpower proposals, the six categories of staff should be
divided into three groups, being P/D and CP, SP and P, and AP and T staff, with typical
weightings of 6:3:1 respectively. Having regard to the level of expertise and
composition of manpower input required for the Services, other suitable weightings
can be assumed.
Maximum Percentages of Cross-grade Assignment of Work
Cross-grade assignment of work between professional and technical grades of staff is
practical in reality. Prior to the invitation of Technical and Fee Proposals, the procuring
department is required to determine the allowable maximum percentages of
cross-grade assignment of work between professional and technical grades of staff (i.e.
the relatively technical work of professional grade that may be done by technical grade;
and the relatively complicated work of technical grade that may be taken up by
professional grade) for the assignment. Typical percentages are 10% and 20% for
professional and technical respectively. For this purpose, the efficiency ratio of
professional to technical manpower to deal with this cross-grade work can be assumed
to be one professional man-hour equivalent to three technical man-hours, and vice
versa. In determining the allowable maximum percentages of cross-grade assignment
of work, highly complex professional work will have limited scope for cross-grade
assignment to technical staff and vice versa.
Endorsement by the Assessment Panel
The justifications for adopting the weighting of technical/consultancy fee/fee quality,
weighting of staff composition, maximum percentages of work for cross-grade
assignment and the Specified Percentage Range should be recorded in the minutes of
the Assessment Panel meeting. These adopted figures should be included in the
submission to EACSB/DCSCs for approval prior to invitation of Technical and Fee
Proposals. However, the weighting of staff categories and maximum percentage of
work for cross-grade assignment should not be disclosed to bidders.
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Revision No. 14 (October 2014)
3.8
Invitation for Technical and Fee Proposals
3.8.1
Procedures relating to Invitation for Technical and Fee Proposals
In accordance with DEVB TCW No. 6/2013, prior to the invitation of Technical and
Fee Proposals, the procuring department should :
(i)
establish the categories of staff for the Services and additional Services (with
additional categories, and/or further breakdown into different ranks and
disciplines if necessary), and minimum qualifications, experience and other
requirements for each category of staff (sample at the Appendix 3.13A);
(ii)
estimate the manpower input (having regard to the shortlist of consultants when a
two-stage consultant selection is adopted) and lump sum fee for the assignment;
(iii) determine the weighting of technical/consultancy fee/fee quality for the
assessment of the Technical and Fee Proposals;
(iv) determine the weighting of staff composition for assessing the manpower
proposals from consultants;
(v)
determine the maximum percentages of work for cross-grade assignment
between professional and technical grade of staff;
(vi) determine the Specified Percentage Range for the assignment;
(vii) for the purpose of considering consultants’ fees for additional Services,
(a) determine the “notional man-hours for additional Services” for each category
of staff;
(b) estimate the all-inclusive time charge rates for each category of staff by
making reference to the similar rates proposed by Consultants in recent
consultancies and other relevant information; and
(c) calculate, based on (vii)(a) and (b) above, a notional value for additional
Services by adding the totals of the multiplication of the notional man-hours
for additional Services and estimated all-inclusive time charge rates for all
categories of staff; and
(viii) if applicable, estimate the notional resident site staff (RSS).
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Revision No. 14 (October 2014)
Stipulation of Specified Percentage Range Requirement
A linkage between “staff rates in lump sum fee” and “staff rates for additional Services”
has been imposed so that the percentage difference between these two sets of staff rates,
in respect of both professional and technical staff, shall not exceed the Specified
Percentage Range, failing which the Fee Proposals shall not be considered further in the
consultants selection exercise. However, the relative proportion amongst different
categories of staff building up the proposed lump sum can be very different from that
specified in the notional man-hours for additional Services. Linkage should be imposed
on a more like-to-like basis. This is to avoid leverage of additional Services to claim
additional fees unreasonably for offsetting a low fee bid.
Amongst consultancies of typical weightings mentioned in Section 3.11.2, the
Specified Percentage Range of 35% can be adopted for a technically straightforward
assignment which generally involves limited disciplines (i.e. with a 54% technical/36%
consultancy fee/10% fee quality weighting), or an assignment with a well-defined
scope of Services when tendering and with only minor risks of additional Services. On
the contrary, the Specified Percentage Range of 50% can be deployed for
multi-disciplinary projects that require special emphasis on technical input (i.e. with a
72% technical/18% consultancy fee/10% fee quality weighting), or when the project
scope is less defined with higher risks of additional Services. For an assignment
adopting 63% technical/27% consultancy fee/10% fee quality weighting, the Specified
Percentage Range of 40% or 45% may be used having regard to the
multi-disciplinary nature of the project, the risks for scope changes and variations, and
other considerations. The Specified Percentage Range for these consultancies are
consolidated below.
Technical/Consultancy Fee/Fee Quality Weighting Specified Percentage Range
54% / 36% / 10%
35%
63% / 27% / 10%
40% or 45%
72% / 18% / 10%
50%
The procuring department is required to determine the Specified Percentage Range with
due regard to the scope, nature and complexity of consultancy services to be procured.
A Specified Percentage Range beyond the range of 50% to 35%, or any other values
for the typical technical/consultancy fee/fee quality weighting above to suit
circumstances of individual consultancy should be endorsed personally by a D2 rank
officer in the procuring department.
The Specified Percentage Range should be stipulated in the invitation letter for
Technical and Fee Proposals so that any Fee Proposal in which the percentage
difference between the concerned staff rates for a category of staff exceeds the
Specified Percentage Range shall not be accepted.
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Revision No. 14 (October 2014)
Submission of Technical and Fee Proposals
The shortlisted consultants should be invited to submit a Technical Proposal to the
managing department and separately a Fee Proposal to the Chairman, EACSB. The Fee
Proposal must be submitted in a sealed package marked "Restricted (Contract)" and on
which the consultant's name and consultancy reference shall be clearly indicated. The
managing department should ensure that all the shortlisted consultants have received
the invitation letter by acknowledging receipt. The deadline for submission of
Technical and Fee Proposals shall be before 12:00 noon on the date specified. Late
submission will not be considered.
3.8.3
Invitation Letter
The invitation letter should include a copy of the draft Brief, together with any
additional relevant background information (e.g. timing requirements), and should give
a deadline for submission of Technical and Fee Proposals. The invitation should also
include an outline of the marking scheme for Technical Proposals, a proforma for the
presentation of Fee Proposals, the technical/consultancy fee/fee quality weighting, the
Notional number of man-hours for additional Services for each of the posts to be used
for assessment of the time-charge rates, and where appropriate the Notional number of
man-months of RSS to be used for assessment of RSS on-cost charges. At the time of
sending out the invitation letter, a copy of the first two pages of the Fee Proposal
proforma (see Section 3.11.1), together with the names of all the shortlisted consultants
(including also sub-consultants), should be sent to the Chairman, EACSB through the
Secretary, EACSB to notify the Chairman of the submission deadline for the Fee
Proposals.
The invitation letter should include guidelines on the preparation of Technical
Proposals (DEVB TCW No. 1/2014). It should seek to standardise the format of the
Technical Proposals to suit the requirements of the particular consultancy and to
restrain the consultants from preparing unnecessarily expensive or glossy submissions.
In particular, the maximum length of the Technical Proposal should be commensurate
with the complexity of the consultancy and should normally be not more than 30 A4
pages. To facilitate consultants’ better understanding of the history/status of the
project and hence provide better submissions, copies of relevant study reports should
be made available to all potential bidders. For environmental friendliness, electronic
copies should be preferred.
In order to mitigate against any conflicts of interest, the managing department should
prepare a list of all the consultants and sub-consultants involved in making submissions
for the consultancy, and should include the list with the letter inviting the submission of
Technical and Fee Proposals. The provisions in Section 3.8.4 should be observed for
any change in this list. The managing department should specify in the invitation letter
a deadline (say at least five working days before the deadline for submission of the
Technical and Fee Proposals) for the shortlisted consultants to give notification of any
change in their sub-consultants. The invitation letter must state clearly the
consequences of not complying with this late notification of the change shall result in
the consultant being disqualified. It also needs to explain that a notification shorter
than the specified period is not allowed because it will deprive the Assessment Panel of
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Revision No. 14 (October 2014)
a proper chance to review how the change will affect the shortlist status of the firm and
to notify bidders.
Under SPR 530(c), any documents of unsuccessful consulting firms may be destroyed
three months after the date the relevant contract has been executed. To avoid
misunderstanding and any possible complaints, the above arrangement should be spelt
out clearly in the invitation letter to consultants.
The invitation letter should make it clear that shortlisted consultants of which the
Technical and Fee Proposals have been completely assessed in the combined score
assessment will be informed of the total marks awarded to, and the fee proposed by,
each consultant making a submission. The letter should also make clear the
requirements of disclosure of fees payable to the consultants as set out in the SCE.
The invitation letter should specify a validity period for Technical and Fee Proposals,
as required under the then SETW’s memorandum ref.(010Q6-03-2) in ETWB(PS)
106/43 dated 25 April 2006. In this regard, the following related guidelines should also
be observed:
(a) The managing department should ensure that the consultants have provided the
required confirmation as specified in the invitation letter for Technical and Fee
Proposals at Appendix 3.4 in their submissions.
(b) After the expiration of the validity period, a proposal cannot be accepted without
the written consent of the consultant to extend the validity period.
(c) If such an extension is anticipated before the deadline for submission of Technical
and Fee Proposals, a notification letter should be issued to the consultants.
(d) If such an extension is required after the deadline for submission of Technical and
Fee Proposals but before acceptance by the EACSB (i.e. approval of the nomination
stage submission), a letter enclosing a standard confirmation letter for reply (see
Appendices 1 and 2 of the then SETW’s memorandum above) should be written to
the shortlisted consultants asking for their agreement to extend the validity period
without changing their original Technical and Fee Proposals. The action should
then be justified and recorded, and highlighted in the nomination stage submission,
under the heading “Background/Argument”.
(e) If such an extension is required after acceptance by the EACSB (i.e. approval of the
nomination stage submission), the letter should be written to the shortlisted
consultants asking for their agreement to extend the validity period without
changing their original Technical and Fee Proposals. If the successful consultant
agrees to the extension unconditionally, there is no need to inform the EACSB. If
not, it will be necessary to re-submit the case to the EACSB, recommending another
suitable consultant who has confirmed agreement to extending the validity period.
It should be noted that a consultant’s refusal to extend will render his Technical and
Fee Proposals ineligible for acceptance after expiry of the original validity period.
Also, a consultant’s agreement to extend subject to conditions will be considered as
a qualified bid and will be rejected.
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Revision No. 14 (October 2014)
(f) The consultants should be reminded that the letter seeking their agreement to an
extension of the validity period does not signify either an acceptance or a rejection
of their proposals, all proposals are still under consideration and Government does
not bind itself to accepting any proposal.
A sample letter is given at Appendix 3.4.
3.8.4
Changes in Circumstances
If, after the EACSB’s approval of the Shortlist of consultants, there are changes in
circumstances that may have affected the original shortlisting results, for instance
change of sub-consultants by any shortlisted consultants, then the Assessment Panel
should conduct a review to examine whether the consultant should be excluded from
the approved Shortlist. The managing department should revert to the EACSB if the
outcome of the Assessment Panel’s review recommends change in the approved
Shortlist of consultants. Where appropriate, the managing department should issue an
updated list of consultants and sub-consultants to the relevant shortlisted consultants
after the matter has been finalised.
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3.9
Revision No. 14 (October 2014)
Pre-submission Meeting with Shortlisted Consultants
A single formal pre-submission meeting with all shortlisted consultants should be held
to resolve queries and to ensure that the consultants are fully aware of the requirements
of the project, and of the requirements for the Technical Proposal and Fee Proposal.
The consultants should be invited to comment on all documents relating to the
submissions,
such
as
the
payment
schedule,
marking
scheme,
technical/consultancy/fee quality weighting, Brief and Conditions of Employment etc.
Other meetings with individual consultants, if requested by them, are permitted,
provided all shortlisted consultants are informed of any matters of general applicability
arising from the meetings, except those matters related to the confidentiality of
individual consultants.
Departments should ensure that the consultants are given adequate time prior to the
pre-submission meeting to study all the consultancy documents and to formulate any
queries they may have.
The Brief and the payment schedule should not be finalized until after the
pre-submission meeting, so that they can take the consultants' comments and queries
into account. Once the Brief and the payment schedule are finalized, a copy should be
sent to the consultants, together with any documents amended as a result of queries at
the pre-submission meeting.
Subject to Section 4.6, minor refinement to the payment schedules may be considered.
3.10
Submission and Assessment of Technical Proposals
The Technical Proposal should contain details of the total manpower input under
categories of staff (e.g. partners/directors, chief professional, senior professional,
professional, assistant professional and technical staff, etc.) specified in the invitation
letter in terms of man-weeks. In addition, it should include a Manning Schedule, in a
bar-chart form, to show the grouping of key staff under different categories and time
inputs of key staff such as Study Directors/Managers and Team Leaders of relevant
disciplines. In providing the Manning Schedule, the consultants must not give any
information in the Technical Proposal on charge rates or fees.
The Technical Proposals shall be received by the managing department and assessed by
the Assessment Panel. The Assessment Panel should focus discussion on widely
differed marks (marks differing by two grades or more), and any unusual high or low
marks. Discussion on why marks have been so different and conclusions of the
discussion (e.g. whether or not marks have been adjusted and the marking member(s)
concerned in each case; why diverging views/marks are acceptable; why a certain
consultant has been considered suitable by the Panel despite negative
comments/relatively low grades given by member(s) ) should be properly recorded in
the minutes. Reason(s) for mark adjustment(s) should be recorded in sufficient detail
as a matter of good practice and proper record. The minutes of the Assessment Panel
meeting should also indicate clearly whether the consultants are technically capable of
undertaking the assignment. In circumstances where a certain criterion of the
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Revision No. 14 (October 2014)
Technical Proposal has been assessed by members as “Poor”, the Panel’s
conclusion/view as to why the consultant is still considered capable of undertaking the
assignment despite such rather negative assessment result should be clearly addressed
and recorded in the minutes.
For the assessment of the “Adequacy of Professional and Technical Manpower Input”
attribute in the Technical Proposal, partners/directors, chief professional, senior
professional and professional staff will be collectively analysed as professional grade
of staff while assistant professional and technical staff will be regarded as technical
grade of staff in the manpower assessment. The Assessment Panel should calculate the
“weighted average manpower input” separately for professional, technical and all staff
proposed by all consultants according to the pre-determined weighting of staff
categories, and mark them against the median’s weighted average manpower input. If
necessary, cross-grade working should be carried out in accordance with Section 3.7. A
work example is at Appendix 3.16 and a flow chart showing the step-by-step
procedures for the assessment of manpower attribute is at Figure 3.2.
A bid with the “Adequacy of professional and technical manpower input” attribute
graded “Poor” should not be automatically taken as a bid with unacceptably low
manpower input. The Assessment Panel should examine closely the tender and
exercise their judgement to assess whether it should be considered further and the
concerned Fee Proposal should be opened. The examination includes the consultant’s
staff organisation and composition with regard to the manpower input of each staff
category. A lower manpower input is possible when, for instance, a multi-disciplinary
consultant undertaking the whole or majority of the Services of a multi-disciplinary
consultancy would minimise interfaces; a very effective/efficient organization
proposed would enhance interfacing and communication amongst consultants and
sub-consultants; staff with proven experience on the Services being procured or staff
acquainted with the nature of the assignment would provide the Services more
effectively/efficiently.
A summary of the results and the relevant minutes of Assessment Panel meetings
should be sent to the Chairman, EACSB through the Secretary, EACSB requesting for
Fee Proposals to be opened. The Chairman EACSB will open the Fee Proposals only
after the Assessment Panel's results are received. The Fee Proposals will then be
provided to the managing department.
In certain circumstances, the managing department may require the consultants to
make short presentations of their Technical Proposals prior to the marking of the
Proposals. Such presentations should only be made to the Assessment Panel alone.
3.11
Submission and Assessment of Fee Proposals
3.11.1 Fee Proposals
Details relating to the Fee Proposal were originally promulgated in WBTC No.
15/2001, ETWB TCW No. 23/2003, ETWB TCW No. 23/2003A and ETWB TCW No.
23/2003B which have been archived and their requirements have generally been
subsumed hereunder.
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Revision No. 14 (October 2014)
With a view to facilitating the Assessment Panel to make accurate assessment on the
manpower input and unit charge rates proposed by consultants, the proposed lump sum
fee on the first page of the Fee Proposal shall be equal to the total fee for staff and
non-staff costs for all stages in the summary breakdown of lump sum fee. The
information/data, in particular, the manpower input in the Fee Proposal, shall tally with
the Technical Proposal.
Departments should not recommend the acceptance of Fee Proposal in which the lump
sum fee on the first page of the Fee Proposal is different from the total fee for the staff
and non-staff costs in the summary breakdown of lump sum fee. When a department
finds that the lump sum fee is different from the total fee for the staff and non-staff
costs for all stages in the summary breakdown of lump sum fee or the information/data,
in particular, the manpower input in the Fee Proposal does not tally with the Technical
Proposal, the department should request the consultant to rectify it within a reasonable
time limit to be specified by the department. The consultant shall be allowed to rectify
the Fee Proposal by correcting arithmetic errors or making adjustments to the unit
charge rates or amending any information/data to bring it in line with the Technical
Proposal, where appropriate. However, the consultant shall not be allowed to make any
adjustment to the lump sum fee, all-inclusive time charge rates and on-cost rates on the
first page of the Fee Proposal.
Consultants are required to submit in the Fee Proposal a lump sum fee which is derived
from their manpower input and the corresponding staff rates (hereafter called “staff
rates in lump sum fee” in this paragraph). Consultants are also required to provide in
the same Fee Proposal a set of all-inclusive time charge rates for additional Services
(hereafter called “staff rates for additional Services” in this paragraph) to be used for
ordering additional Services which are not covered by the original scope. Whilst the
staff rates in lump sum fee are derived from pre-determined programme and scope of
assignment, the staff rates for additional Services have to cater for the uncertainties
arising from the additional Services of undefined scope at the time of submission.
Therefore, it is acceptable that two sets of staff rates are different. However, in some of
the submissions, there are substantial differences between these two sets of staff rates,
which are unreasonable. Therefore a mechanism is introduced to rationalize Fee
Proposals submitted by Consultants. A linkage between “staff rates in lump sum fee”
and “staff rates for additional Services” is imposed so that the percentage difference
between these two sets of staff rates, in respect of both professional and technical staff,
shall not exceed a “Specified Percentage Range”, as determined by the Assessment
Panel. Fee Proposals in which the percentage difference between the two sets of staff
rates exceeds the “Specified Percentage Range” shall not be accepted.
Departments should incorporate the requirements in the above three paragraphs as
conditions in the letter inviting submissions from consultants so that the consultants
would be bound to follow the requirements. A set of conditions is incorporated in the
sample invitation letter given at Appendix 3.4.
The Fee Proposal should include, as appropriate to the project:
(a) lump sum fee figure (or all-inclusive time-charge rates where it is not feasible to
invite lump sum fee);
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Revision No. 14 (October 2014)
(b) all-inclusive time charge rates for additional Services;
(c) where appropriate, RSS on-cost rates to be used in calculating payment for the
administration of RSS;
(d) breakdown of fee among stages of the Agreement;
(e) breakdown of fee among disciplines of the project; and
(f) make-up of lump sum fee for staff cost, in the form of a Manning Schedule with
all-inclusive unit rates shown against each staff member.
Consultants shall be required to present their Fee Proposals on a standard proforma
prepared by the managing department in the format specified at Appendix 3.13 with
related details at Appendix 3.13A. Where appropriate, the provisions relating to RSS
as given at Appendix 3.5 should be added to the end of the Fee Proforma. Provision
should be made in the proforma for the consultant to list any items of additional
Services that are recommended for inclusion in the Brief. The consultant shall provide
an estimated lump sum fee for each item. Such lump sum(s) will only be for the
Client/Employer’s reference and shall not form part of the lump sum used in the
assessment of Fee Proposals and application of the technical/consultancy fee/fee
quality weighting.
The sample Fee Proforma for time charge assignments at Appendix 3.13B should be
used for assignments where the bidding and remuneration of the consultant on a lump
sum basis is considered to be inapplicable.
In accordance with DEVB TCW No. 6/2013, the procurement department should check
the compliance with the Specified Percentage Range requirement, as well as assess the
consultancy fees and fee quality in the assessment of fee proposal.
Compliance with the Specified Percentage Range Requirement
In checking the compliance with the Specified Percentage Range requirement, the
procuring department should convert the all-inclusive time charge rates submitted in
the Fee Proposal to the “staff rates for additional Services” for each category of staff. If
the procuring department requires the consultants to submit more than one set of
all-inclusive time charge rates, e.g. for additional Services of emergency nature or
additional Services of work to be done overseas, such additional sets of all-inclusive
time charge rates should not be used in calculating the “staff rates for additional
Services”. The procuring department should extract the “staff rates in lump sum fee”,
in respect of each staff category, from “Table D” of all stages in the Fee Proposal. The
“Percentage Difference” for each staff category should be calculated according to the
following formula –
Percentage
Difference
=
[
Staff rates for
additional
Services
–
Staff rates
in lump
sum fee
]/[
Staff rates for
additional
Services
]
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Revision No. 14 (October 2014)
A conversion factor of 40 hours/week shall be adopted throughout the calculation of
the “Percentage Difference”. Any Fee Proposals in which the “Percentage Difference”
between the “staff rates for additional Services” and “staff rates in lump sum fee”, for
any staff category, exceeds the Specified Percentage Range shall not be considered
further in the consultants selection exercise. A worked example of checking of
compliance with the Specified Percentage Range requirement is given at Appendix
3.16.
Assessment of Consultancy Fees
The procuring department should compute the consultancy fee which is the sum of
lump sum fee (comprising staff costs and non-staff costs), adjusted notional value for
additional Services (refer to Section 3.11.3), and, if applicable, notional resident site
staff on-cost charges (refer to Section 3.11.4).
Assessment of Fee Quality
For conforming bids, to mark the fee quality, the Assessment Panel should compare the
consultancy fee calculated and the “Reference consultancy fee” which is derived using
the median staff/on-cost rates for lump sum fee/additional Services/RSS on-cost
respectively. Based on this fee quality score and the comparison of the fee bid
concerned with the immediate higher one, the reasonableness of the bid can be better
gauged.
3.11.2 Technical /Consultancy Fee /Fee Quality Weightings
Standard technical/fee weightings have been established for three categories of project.
These will be kept under review by DEVB and the EACSB. Taking into account a new
criterion, viz. “fee quality” which carries a 10% weighting to be taken proportionally
from the assessment criteria on Technical Proposals and Fee Proposals under DEVB
TC(W) No. 6/2013, the categories of projects and their appropriate weightings are :
(a) Multidisciplinary projects that require special emphasis on technical input,
including complex Feasibility Studies and Investigation-stage consultancies, and D
& C consultancies of above average complexity :
Technical / Consultancy Fee / Fee Quality Weighting: 72%/18%/10%.
(b) Less complex Feasibility Studies and Investigation-stage consultancies, and D & C
consultancies of average complexity :
Technical / Consultancy Fee / Fee Quality Weighting: 63%/27%/10%.
(c) Technically straightforward D & C consultancies :
Technical / Consultancy Fee / Fee Quality Weighting: 54%/36%/10%.
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Revision No. 14 (October 2014)
The choice of weighting for a particular project should be made by the Assessment
Panel and should be subject to the approval of the EACSB prior to inviting
submissions.
An example of the method of applying the approved weighting to determine the award
of a consultancy is given at Appendix 3.16.
3.11.3 Additional Services
Under Clause 33 of the Government’s GCE and Clause 5 of the Schedule of Fees, the
Consultants are entitled to payment where additional Services are performed.
For additional Services paid on a time charge basis under Agreements awarded prior to
the promulgation of ETWB TCW No. 23/2003, partners and directors were to be paid
at a preset fixed rate, whereas professional and technical staff were to be paid according
to the salary costs of the staff actually deployed for the job and the time charge
multiplier proposed by the Consultants in the Fee Proposals.
Upon the promulgation of the above TCW in August 2003, the method of determining
Consultants’ fees for additional Services was revised to eliminate inconsistency and to
strengthen competitiveness in consultancy bidding. Under this currently adopted
approach/method, consultants are invited to propose all-inclusive time charge rates for
different categories of staff for additional Services in their Fee Proposals. These rates
should be used to calculate the adjusted notional value (AN) for additional Services
which should then be added to other fee components to arrive at a total fee for
assessment of Fee Proposals.
Despite the fact that the time charge rates are fixed at the time of submitting Fee
Proposals, it is expected that Consultants will deploy the most suitable staff for the
additional Services because the quality of their services will be reflected in their
performance reports.
Procedures to be Adopted by Departments Before Inviting Proposals:
Notional Value
Before invitation of Technical and Fee Proposals, the procuring department should
have determined a Notional Value (N) for additional Services, to cover contingency
and any designated services of unknown quantity e.g. site investigation supervision.
The procuring department should assess the risks of changes to the Brief (including the
scope of assignment, service requirements, consultation strategy, etc.), leading to
additional Services, and endeavour to reduce the risks as far as practicable. The amount
of this notional value will depend on the comprehensiveness of the Brief and the nature
of the Assignment, and should not exceed 10% of the estimated lump sum fee unless
with full justifications.
If the residual risks are still expected to result in notional value exceeding 10% of the
estimated lump sum fee after all risk mitigation measures have been taken practicably,
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Revision No. 14 (October 2014)
the procuring department should seek approval from the EACSB for a higher notional
value for additional Services. Alternatively, the procuring department may consider
switching to time charge mode for procuring a part of the Services where the exact
extent still cannot be fully defined before the invitation of proposals.
To establish the notional value, the department should:
(i)
establish the categories of staff e.g. partners/directors, professional and technical
staff (with additional categories, and/or further breakdown into different ranks
and disciplines if necessary), for the purpose of considering Consultants’ fees for
additional Services;
(ii)
specify the minimum qualifications, experience and other requirements for each
and every category of staff (sample at Appendix 3.13A) ;
(iii) determine the notional man-hours for additional Services for each and every
category of staff;
(iv) estimate the hourly rates for each and every category of staff by making reference
to similar rates proposed by Consultants in recent consultancies and other
relevant information;
(v)
based on (iii) and (iv), calculate a notional value for additional Services by
adding the totals of the notional man-hours for additional Services and estimated
hourly rates for all categories of staff.
Procedures to be Adopted by Departments on Reviewing Consultants’ Proposals:
The consultant shall in response insert in its Fee Proposal a lump sum offer for
performing the Assignment and an all-inclusive hourly rate for each and every category
of staff for use in valuing any additional Services instructed.
Adjusted Notional Value
The managing department will use the notional man-hours for additional Services and
the consultant’s proposed all-inclusive hourly rates entered in the Fee Proposal to
calculate the adjusted notional value (AN) for additional Services, by using the formula
Adjusted
notional
value for additional
=
Services
Notional man-hours
for additional
Σ [ Services
Proposed
all-inclusive
x hourly rate
]
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Revision No. 14 (October 2014)
The adjusted notional value for additional Services will be added to other fee
components to arrive at a total fee for assessment of Fee Proposals.
Fee Ceiling
The fee ceiling for additional Services to be approved by the consultants selection
board should be equal to the adjusted notional value for additional Services, or 10% of
the Consultant’s lump sum offer for performing the Assignment accepted by the
Employer, whichever is the lesser except if a percentage higher than 10% has been
approved by the EACSB.
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Revision No. 11 (October 2011)
3.11.4 Notional Resident Site Staff On-Cost
Where appropriate, estimated requirements of RSS cost and on-cost should be
determined by the procuring department. The determination of fees relating to RSS
directly employed by the consultants and requirements of the relevant standard
documents are given in DEVB TCW No. 4/2008 (see Section 6).
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Revision No. 14 (October 2014)
3.11.5 Opening of Fee Proposals
The Fee Proposals are to be received by the Chairman, EACSB and kept sealed and
secure. To ensure that the Fee Proposals do not influence the technical assessment, they
will be opened and collected by the managing department only after receipt by the
Secretary, EACSB of the summary of the finalised results of the technical assessment
(see Section 3.10). The procuring department should check the Fee Proposals, apply
approved technical/consultancy fee/fee quality weightings and make a formal
submission and recommendation to the EACSB.
No amendment shall be made to the Fee Proposals except for the correction of
arithmetical errors. The details of any inconsistencies or omissions, with
recommendations on how they should be dealt with, should be included in the
submission to the EACSB. No negotiation of the proposed fees will be allowed.
If, at the time of the technical assessment, the Assessment Panel considers that a
consultant is unacceptable on technical or other appropriate grounds and shall not be
considered further, the procuring department should record the detailed justifications in
the minutes of the Assessment Panel Meeting before the Fee Proposals are opened. In
particular, a consultant who proposes an unacceptably low manpower input shall not be
considered further for the consultancy, regardless of the markings of the other aspects
of his Technical Proposal. A sample memo for the release of Fee Proposals is given at
Appendix 3.7.
As promulgated in ETWB TCW No. 8/2003, it is not in the interest of the Government
to accept an unreasonably low bid. Managing departments should adopt a flexible
approach and reject bids which have been priced unreasonably low. The head of the
managing department must be personally satisfied with and agree to the
recommendation made to the EACSB to reject an unreasonably low bid. The
recommendation itself must be fully justified. Provisions to supplement the policy are
promulgated in SDEV’s memorandum ref. (022UY-01-10) in DEVB(PS) 510/10/01
dated 31 August 2009 for unreasonably low bids. A sample letter to the bidders on
unreasonably low bids is given at Appendix 3.17, which may be amended by project
officers to suit the needs of their individual consultancy agreements, and in case of
doubt, they should consult LAD(W). Support / endorsement by the relevant HoD for
rejecting an unreasonably low bid must be clearly indicated and detailed in the EACSB
submission, under the heading “Background/Argument”.
3.11.6 Pre-tender Estimates and Examination of Fees and Rates of Consultancy
Proposals
(a)
Pre-tender Estimates
To ensure that the pre-tender estimates, i.e. the “Estimated Fees” reflect the
market prices closely, the department should review and update, where
appropriate, the “Estimated Fees” prior to inviting EOI by making reference to
the prevailing market prices and any other relevant information. In this
connection, a list has been compiled in accordance with data extracted from
- 39 -
Revision No. 14 (October 2014)
EACSB / DCSC submissions (the List) providing relevant information for
department’s reference.
The List can be accessed via the Consultants’ Performance Information System
(CNPIS). It lists out the median values of manpower input and staff rates in lump
sum fee, all-inclusive time charge rates for additional Services and RSS on-cost
rates for typical staff categories amongst all conforming bids and the
department’s estimate.
During the shortlisting stage and after the subsequent pre-submission meeting
with the consultants, the Brief may be altered which in turn may affect the
“Estimated Fees”. While this “Estimated Fees” should reflect closely the market
prices, it should normally be expected to remain unaltered after the finalization of
the Brief incorporating any comments received in the shortlisting stage and the
subsequent pre-submission meeting.
In any event, all necessary revisions to the “Estimated Fees” should be made
before the deadline for the submission of the Technical and Fee Proposals. Any
such revision to the “Estimated Fees” should be recorded in the submission to the
EACSB indicating the time of and the reasons for the revision.
(b)
Examination of Fees and Rates
Upon receiving the opened Fee Proposals, an assessment on the reasonableness
of fees and rates against the items set out in paragraph 10 of DEVB TCW No.
6/2013 and, if necessary, paragraph 7 of ETWB TCW No. 8/2003 should be
carried out.
For conforming bids, the reasonableness of the Fee Proposals will be assessed
with two tests, in respect of the staff rates first and then the overall consultancy
fee. Test 1 comprises a comparison of the consultancy fee and the “Reference
consultancy fee” which is derived using the median staff/on-cost rates for lump
sum fee/additional Services/RSS on-cost respectively as mentioned in Section
3.11.7 in lieu of the proposed staff/on-cost rates of the bid under assessment. This
reflects whether the rates in the lump sum fee are reasonable or not. A ratio of
≤0.5 will fail the test, revealing unreasonably low staff rates of the bid. Test 2 is
to assess the reasonableness of the consultancy fee (save the highest one) with
reference to the immediate higher bid and a ratio of ≤0.7 will fail Test 2. The bid
under assessment is, prima facie, an unreasonably low bid if it fails both Tests 1
and 2.
If the unreasonably low bid is to be the recommended bid, procuring department
should make enquiry to the bidder concerned, seeking justifications with positive
proof for the unreasonably low bid, including but not limited to any unreasonably
low manpower input and staff/on-cost rates for each staff/RSS category, so as to
find out whether the bidder is capable of fulfilling the terms of the consultancy
before making recommendation. In considering the bidder’s reply, care should
be taken to ensure that the bidder will not take the opportunity to change or
qualify its tender price or rates, or to enhance its tender or to cause any unfairness
to other bidders.
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Revision No. 14 (October 2014)
The head of procuring department must be personally satisfied with and agree to
the recommendation made to the EACSB to reject an unreasonably low bid. The
recommendation itself must be fully justified.
The details of the assessment should be presented in the nomination stage
submission to the EACSB. As the case may be, the department should draw the
attention of the EACSB on fees and rates which are considered substantially over
or under-priced.
3.11.7 Combined score assessment
In consultants selection exercise, a higher weighting has been placed to assess
consultants’ Technical Proposals than Fee Proposals. However, there are genuine
concerns that an unreasonably low bid if selected, may carry an inherent risk to project
delivery in terms of budget exceedance and time delay. In accordance with DEVB
TC(W) No. 6/2013, a new criterion “fee quality” has been introduced to assess the
reasonableness of the Fee Proposals from the consultants. The Technical and Fee
Proposals will be assessed on the basis of a combined score in terms of technical,
consultancy fee and fee quality in a rationalised approach as follows:
Combined
Score
=
Weighted
Technical
Score
+
Weighted
Consultancy
Fee Score
+
Fee Quality
Score
where :
Weighted
Technical
Score
Weighted
Consultancy
Fee Score
Fee Quality
Score
Sliding scale
=
Specified
Weighting
=
Specified
Weighting
=
Sliding
scale of
:
X
Technical score of
the tender being assessed
Highest technical score among all
conforming tenders
X
Lowest consultancy fee
among all conforming tenders
Consultancy fee of
the tender being assessed
Consultancy fee of
the tender being assessed
“Reference Consultancy Fee”
of the tender being assessed
The tender will score 10 marks on the assessment criterion of
“fee quality” for a ratio of 0.7 or above, 0 mark for a ratio of 0.5
or below and a proportional mark for a ratio between 0.7 and
0.5.
- 41 “Reference
Consultancy
Fee”
:
Revision No. 14 (October 2014)
It is the sum of the “Reference lump sum fees”, “Reference
notional value for additional Services” and, if applicable,
“Reference notional resident site staff on-cost charges”. It is
derived solely for the assessment of the reasonableness of the
fee bid. These “reference” values are calculated by summing up
the multiples of median staff/on-cost rate (among all
conforming tenders and pre-tender estimate) of each staff
category and the respective staff/on-cost input in the tender
being assessed. The consultancy fee of a tender shall remain
contractually binding and will not be affected by the
“Reference consultancy fee” in any degree.
A worked example of the assessment of combined score assessment is at Appendix
3.16 and a flow chart showing the step-by-step procedures on the assessment of the Fee
Proposal is at Figure 3.3.
3.12
Stage 2 EACSB Submission (Nomination Stage)
The EACSB submission should include:
(a) fee estimate/order of cost of project, summary of fees;
(b) brief report on the Technical Proposals and order of assessment;
(c) outline of the assessment process, including composition of the Assessment Panel,
minutes of the Assessment Panel meetings, weightings, and any other relevant
factors considered;
(d) a summary assessment score sheet;
(e) statement to the effect that the issue of SPR 186 has been fully addressed;
(f) recommendation for a preferred consultant; and
(g) soft copies of any previous DCSC submissions. (If applicable, departments should
attach a CD-Rom/DVD-Rom containing soft copies of all previous submissions
approved by DCSC for the same agreement (with record of approval) but not having
been submitted to EACSB before. Each previous submission should be contained in
a single pdf file.)
A sample submission is given at Appendix 3.8.
After the EACSB's approval has been given and the Agreement has been signed, the
Secretary, EACSB should be notified, using the standard memo form at Appendix 3.9,
that the Agreement has been entered into. A certified copy of the Agreement document
should also be forwarded to the Secretary, EACSB for record purpose.
- 42 3.13
Revision No. 14 (October 2014)
Notification of Technical Marks, Fees and Manpower Input to Shortlisted
Consultants
Once the EACSB/DCSC has approved the appointment of a consultant, the Secretary,
EACSB/DCSC will provide the managing department/office with the information on
technical marks, fees and manpower input in the format shown at Appendix 3.11. The
procuring department should forward this information without delay to the shortlisted
consultants of which the Technical and Fee Proposals have been completely assessed.
At the same time, the procuring department should separately advise any consultant(s)
of which the Technical and Fee Proposals have not been completely assessed with
reasons why the Assessment Panel has made such a decision. In case (i) the
Assessment Panel has affirmed the consultant(s) not technically capable of carrying out
the consultancy and recommend not open the fee proposal(s), or (ii) for the unopened
fee proposal(s) which are not in the top four under the one-stage consultants selection
(see note 5 of Appendix 3.10), the procuring departments should inform the Secretary,
EACSB to return any unopened fee proposal(s) to the consultant(s).
In addition to the above, the procuring department should also provide feedback to
bidders, including debriefing where appropriate to unsuccessful bidders who have
submitted conforming technical and fee proposals. Details are given originally in
ETWB TCW No. 42/2002 the relevant content of which has now been subsumed at
Appendix 3.18.
- 43 -
3.14
Revision No. 14 (October 2014)
Release of Information on Consultancy Studies
In order to further enhance the openness of the government procurement process, upon
request by a third party, the lump sum fee of the successful consultants will be released.
Managing departments should incorporate the provisions set out at Appendix 3.12 into
the SCE.
Procuring departments should publish the award of consultancies on their websites,
after a formal consultancy agreement is signed. Such information should be updated
on a regular basis, preferably not less than once every month. Notice of award of a
consultancy should remain on the website for a reasonable period of not shorter than six
months. Information on award of consultancies to be published should include
agreement number, agreement title, name of successful consultant(s), lump sum fee (or
estimated/notional fee if remuneration is not based on lump sum), commencement date
and estimated completion date.
3.15
Direct Selection of a Single Consultant for Fee Negotiation
All consultancies should be awarded on the basis of technical and fee competition
unless there are very exceptional reasons for a direct selection. Circumstances which
might warrant a direct selection of a single consultant without calling for Technical and
Fee Proposals are:
(a) where, after a detailed preliminary assessment, it is clear that only one consultant is
available who possesses the necessary requirements for the assignment;
(b) where, because of prior association with related works, a particular consultant
already possesses unique knowledge or experience which makes him clearly much
better qualified than any other consultant;
(c) where the Services are required so urgently that an extreme problem would arise if a
full submission procedure were used, and where a suitable consultant is clearly
available;
(d) where a consultant is obtained by application to Head (Geotechnical Engineering
Office), Civil Engineering and Development Department (H(GEO), CEDD) for
urgent geotechnical work of an estimated value not exceeding $15M.
All fee packages should be negotiated as far as possible as a lump sum fee independent
of the cost of the works. If it is considered that the negotiation of a lump sum is not
feasible, the fee should be based on time charges.
Following approval from the EACSB to commence negotiations with a directly
selected consultant, an approach should be made as soon as possible. It is only possible
to agree terms properly if the fees and conditions including the draft Brief are taken
together. Therefore the consultants should be provided with a copy of the various parts
of the standard forms of agreement, which it is intended to apply to the particular
- 44 -
Revision No. 14 (October 2014)
assignment under consideration together with a request to provide a fee submission.
All relevant information required with the fee submission, such as detailed staffing
proposal, breakdown of time charge rates etc., should also be mentioned in the request.
The more comprehensive the information obtained initially the sooner satisfactory
agreement can be reached. The brief must also be finalized during the negotiating
process.
Guidelines on negotiation of a lump sum fee for direct appointment are given in Section
5.3.3.
3.16
Summary of Steps in Appointment of Consultants
A flow chart summarising the steps in the selection and appointment of consultants is
given in Figure 3.1 at the end of this Chapter.
3.17
Variations – Submission to EACSB
When the accumulated value of variations will exceed the total authorised amount (the
EACSB’s original approved fee ceiling for additional Services plus the financial limit
for variations set out in the SPR, see Section 8.2.8), or when the variations are outside
the approved scope of the consultancy assignment provided that the additional Services
are within the approved scope of the project (see Section 8.2.10), the managing
department should seek the EACSB’s approval to negotiate with the consultant to
undertake any proposed variations prior to agreeing with the consultant.
The EACSB submission should include:
(a) brief account of expenditure incurred so far and the current financial status of the
agreement;
(b) justification for proposed negotiation with the original consultant to undertake the
proposed additional Services (under a supplementary agreement, where
appropriate), if letting out a new assignment for the additional Services is not
recommended;
(c) supplementary Brief, where appropriate;
(d) supplementary Schedule of Fees, where appropriate;
(e) detailed breakdown of fee estimate together with the managing department’s
estimated manpower input and rates for the negotiation of the supplementary
agreement; and
(f) soft copies of any previous DCSC submissions, following the same requirements in
Section 3.12(g).
As a general principle, the managing department should always take into consideration
the full implications of the proposed additional Services, and present all relevant details
in the submission for the EACSB’s consideration.
- 45 -
Revision No. 14 (October 2014)
Upon approval to proceed with the proposed negotiation, the managing department
should take into account the guidelines given in Section 5.3.3 in the negotiation.
3.18
Procedures in the Selection of Consultants for Small Consultancy Assignments
A considerable number of small consulting firms in Hong Kong are capable of
providing consultancy services for small consultancy assignments comparable to that
provided by large consulting firms. It is in the interests of the Government to see these
small consulting firms thrive, and that they should be encouraged to participate in
public works projects. Appendix 3.15 details a system for small consulting firms to be
longlisted and subsequently shortlisted. A consultancy assignment is considered as
small if the estimated consultancy fee (the estimated fixed lump sum fee, or
time-charge rates, where appropriate) of the assignment does not exceed $5 million.
Procuring departments should follow the procedures set out at Appendix 3.15 for small
consultancy assignments. Also, as promulgated in DEVB TCW No. 3/2013, the
procuring departments should seek policy support from Works Branch of DEVB for
the exemption of the procedures with justifications.
In cases where approval has been obtained in accordance with the above Appendix for
such procedures to be waived, a copy of approval should be included in the Stage 1
submission.
- 46 -
Revision No. 13 (November 2013)
CONSULTANTS SELECTION PROCEDURES
PRE - EACSB SUBMISSION PROCEDURES
i.
ii.
iii.
iv.
v.
Identify need to engage consultants.
Obtain approval to use consultants.
Obtain funds for use of consultants.
Obtain a consultancy agreement number from EACSB Secretariat.
Define the scope of the assignment, order of costs, estimate of time and manpower input, preliminary
estimate of fees and produce draft brief.
vi. Prepare schedule of fees, including payment schedule, and other agreement documents.
vii. Convene an Assessment Panel.
viii. Prepare a long list together with open invitation and by qualitative selection reduce to a shortlist of
normally 4 consultants.
ix. Prepare marking scheme for technical proposals.
x.
Decide weighting for fee proposals.
xi. Decide notional value for additional Services and notional RSS establishment.
SELECTION BY LONGLISTING/SHORTLISTNG
SINGLE
NORMAINATION
Submit single
nomination to
EACSB
SUBMISSION TO EACSB SHORTLISTING STAGE
Submit shortlist, draft brief, amendments to standard
documents, marking scheme, technical / consultancy fee /
fee quality weighting, notional value for additional
Services, notional RSS establishment, period of
requirement and RSS cost to EACSB.
EACSB rejects
single nomination
EACSB approves.
EASCB accepts
single nomination
Invite technical and fee proposals from shortlisted
consultants.
Hold pre-submission meeting with shortlisted
consultants and finalize brief.
Negotiate fee,
finalize brief and
terms and conditions
Department receives Technical Proposals.
EACSB Chairman receives fee
proposals.
Assess Technical Proposals and convene Panel.
Submit summary of results of assessment to EACSB
Secretary.
EACSB Chairman opens Fee
Proposals, records and sends
Fee Proposals to departments.
Department receives fee proposals from EACSB
Secretary. Make checks, apply weightings and prepare
report and recommendation.
SUBMISSION TO EACSB NOMINATIONS STAGE
Department submits result and recommendation to
EACSB.
EACSB approves recommendation.
Department enters into formal agreement.
Figure 3.1
- 47 -
Revision No. 14 (October 2014)
PROCEDURES FOR THE ASSESSMENT OF
THE MANPOWER ATTRIBUTE IN TECHNICAL PROPOSALS
Procuring department (PD)
to engage consultants for services
PD to propose
(i) weighting of staff categories;
(ii) maximum percentages of
cross-grade assignment of work;
(iii) the Specified Percentage Range;
and (iv) any other requirements
as per paragraph 5 of the Annex D
Before
tender
invitation
The Assessment
Panel to endorse
PD's proposal
No
Yes
PD to invite
Technical and Fee Proposals
To calculate the medians'
weighted average manpower
Upon receipt
of Technical
and Fee
Proposals
Whether
the weighted
average professional and
technical input proposed by a tenderer
>60% of the medians' average
weighted manpower
input?
Yes
No
Whether
cross-grade assignment of
work is possible?
Yes
No
To grade
the manpower
attribute according
to paragraph 6 of
the Annex A
To grade the
manpower attribute 'Poor'
The
Assessment Panel
to consider whether a lower
manpower input by the tenderer is
possible and decide whether to
consider the tenderer's
submission
further
No
Yes
To proceed with
tender assessment
To calculate the
'Weighted Technical Mark'
for tenders
End of
technical assessment
End of tender
assessment for this tender
Figure 3.2
- 48 -
Revision No. 14 (October 2014)
PROCEDURES FOR THE ASSESSMENT OF FEE PROPOSALS
Opening of Fee Proposals
To calculate the staff rates in (i) lump
sum fee; and (ii) additional Services by
staff category for each tender
The Fee Proposal shall
not be considered further
No
Whether
staff rates comply with the
Specified Percentage Range
requirement?
Yes
To determine from the Fee Proposals and
pre-tender estimate the median staff rate/oncost rates for each staff category in (i) lump
sum fee; (ii) notional value for additional
Services; and (iii) if applicable, notional
resident site staff (RSS) on-cost charges
To mark the
'Weighted Consultancy Fee'
assessment criterion
To calculate the 'Reference Consultancy
Fee', being the sum of (i) 'Reference
Lump Sum Fee'; (ii) 'Reference Notional
Value for Additional Services'; and
(iii) if applicable, 'Reference RSS
on-cost charges', for each tender
To mark the 'Fee Quality'
assessment criterion
To calculate a combined
score for the tenders
No
Whether
the ratio of consultancy
fee and 'Reference Consultancy
Fee' for the tender is ≤0.5
(Test 1)?
Yes
No
Whether
the ratio of consultancy
fee for the tender and the immediate
higher bid is ≤0.7
(Test 2)?
Yes
The tender is prima facie an unreasonably low bid
To seek justifications from the
tenderer on the unreasonably low bid
Whether justified ?
No
Recommend
another tender
Yes
To make tender recommendation
End of tender
assessment
Figure 3.3
- 49 -
4.
THE AGREEMENT
4.1
Types of Agreement
Revision No. 13 (November 2013)
A major project is typically divided into four clearly defined “stages” - feasibility
study, investigation, design and construction. Consultants are employed under one of
the following standard types of Agreement:
(a)
Feasibility Study Agreement;
(b)
Investigation Agreement; and
(c)
Design & Construction Agreement.
As originally promulgated under ETWB TCW No. 16/95B, for projects for which the
Controlling Officer is satisfied that the risks of major scope changes following the
Investigation stage are low, the use of IDC Agreements is encouraged (see Section
3.1.3).
4.1.1
Feasibility Study Agreement
The Feasibility Study Agreement normally excludes building or engineering design
and construction Services and avoids any commitment to proceed beyond the
feasibility study or to employ the same consultants for further Services, if any, on the
project. It is used for the following types of project:
(a) for study into a problem or proposal of a general nature to determine the need for
action (e.g. an investigation of pollution levels, an examination of water resources,
or a traffic & transport planning study);
(b) for study into the feasibility of a particular proposal to determine whether and how
it can be undertaken (e.g. a proposal for a new road or a land reclamation proposal);
(c) for study into alternative proposals to determine which should be adopted (e.g.
whether to construct a bridge or a tunnel; whether to lay a gravity pipeline or a
pumping main); and
(d) for study to determine design standards (e.g. geotechnical investigations).
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4.1.2
Revision No. 13 (November 2013)
Investigation Agreement
The Investigation Agreement is used for the investigation stage of a project where the
feasibility and implications of a project are already well established (perhaps as a result
of a previous Feasibility Study agreement). The "Investigation" stage of the
assignment is concerned mainly with the technical and practical aspects of the project.
4.1.3
Design and Construction (D & C) Agreement
The D & C Agreement follows the Investigation stage and involves the preparation of
detailed designs, drawings, specifications and tender documents and leads onto the
administration and technical control of the contracts for works.
4.1.4
Investigation, Design and Construction (IDC) Agreement
The IDC combined type of Agreement may be used in those projects where the risks of
major scope changes following the investigation stage are low. For such assignments,
the scope of the project can be adequately defined at the commencement of the
Investigation stage to enable lump sum fee to be obtained for the design and
construction stages. The Services covered in an IDC agreement are a combination of
those covered under Sections 4.1.2 and 4.1.3. Whilst the EACSB submission should
accordingly indicate clearly the Controlling Officer’s satisfaction with the use of a
combined IDC arrangement and that the risks of major scope changes following the
Investigation stage are low, specific approval from EACSB for the use of IDC type of
agreement is not required.
4.1.5
Other Types of Agreement
Subject to the exceptional approval of the EACSB, other types of agreement may be
used to suit specific projects.
4.2
Components of the Agreement
The agreement comprises:
(a) Memorandum of Agreement
(b) GCE
(c) SCE (if any)
(d) Schedule of Fees
(e) Brief
(f) Schedule of RSS Standards and Duties (if any for Investigation and/or D & C
agreements)
- 51 -
4.3
Revision No. 14 (October 2014)
Memorandum of Agreement
This is the instrument by which the consultants agree to undertake the assignment as set
out in the Brief in accordance with the GCE, any SCE and the Schedule of Fees. Two
standard forms of Memorandum of Agreement issued by the DEVB (promulgated
under DEVB TCW No. 7/2014 and SDEV’s memo ref DEVB(PS) 106/43 dated 10
March 2014) are shown at Appendix 4.1.
4.4
General Conditions of Employment
The GCE establish the authority of the Employer's Representative and provide for him
to be kept fully informed by the consultants and to be given facilities for inspection and
approval. They set out the consultants' duties and responsibilities. They also provide
for the payment of the consultants and contain general provisions regarding the conduct
of the agreement and the rights and obligations of both parties.
Standard booklets of GCE for Feasibility Study, Investigation, and D & C promulgated
by the DEVB (originally under WBTC No. 8/98) should be used.
4.5
Special Conditions of Employment
SCE comprise any conditions required for a particular agreement, which are not
covered by the GCE. Their incorporation may render amendment, deletion or addition
to the GCE.
From time to time, standard and/or mandatory SCE may be promulgated by the DEVB
or the EACSB for use in certain circumstances, and where appropriate, together with
associated requirements and/or guidelines. Currently, standard and/or mandatory SCE
related to the following are in force :
(a) disclosure of fees payable to the consultants (at Appendix 3.12);
(b) requirements for ISO9000 certification (as promulgated in WBTC No. 13/2001 and
SDEV’s memorandum ref. (025B1) in DEVB(W) 520/83/01 dated 26 January
2010);
(c) direct employment of RSS by Consultants and the setting up and use of an RSS
database (as promulgated in DEVB TCW No. 4/2008 and DEVB TCW No. 3/2011,
respectively);
(d) interest on overdue payment (see Section 4.16 and Appendix 4.10);
(e) safety training for RSS (as promulgated in WBTC No. 12/2001 and DEVB TCW
No. 4/2008);
(f) approval of major revisions to approved documents and referral and reporting by
consultants of variation, claims and delay in works contracts (at Appendix 4.11);
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Revision No. 14 (October 2014)
(g) professional indemnity cover (as promulgated in DEVB TCW No. 9/2007) and
SDEV’s memorandum ref (02245-01-13) in DEVB(W) 510/34/01 dated 6 October
2009 (at Appendix 4.17);
(h) projects implemented in phases (at Appendix 4.12);
(i) exclusive ownership (as set out in the then SETW's memorandum ref. (33) in
ETWB(PS)106/1 Pt. 3 dated 24 August 2002);
(j) setting off money due to the Government from defaulting consultants (as
promulgated in the then SETW’s memoranda ref. (59) in ETWB(PS)106/11 Pt 19
dated 2 June 2003, ref. (13) ETWB(PS)106/11 Pt 21 dated 16 April 2004 and ref.
(00UH1-01-7) in ETWB(PS) 106/11 dated 12 October 2005);
(k) disclosure of confidential information (as promulgated in ETWB TCW No.
29/2003);
(l) ethical commitment by consultants (as promulgated in ETWB TCW No. 3/2004
and ETWB TCW No. 3/2004A) and conflict of interest and debarring (at Appendix
4.13 and the then SETW’s memorandum ref. (00WNL-02-4) in ETWB(PS) 106/11
dated 6 January 2006);
(m) retention of documents and inspection (at Appendix 4.14);
(n) retention of money payable to non-resident consultants for settlement of profits tax
in consultancy agreements (at Appendix 4.15); and
(o) Adaption to New Arbitration Ordinance (as promulgated in SDEV’s memorandum
ref. (02BYW-01-2) in DEVB(W) 505/17/01 dated 27 May 2011 and further
amended in SDEV’s memorandum ref. DEVB(W) 505/17/01 dated 26 June 2012)
at Appendix 4.16.
In all other cases where it is intended to modify the standard forms of agreement by the
use of Special Conditions (in addition to any standard Special Conditions),
endorsement to the use of such Special Conditions should be sought from the DEVB.
Legal advice should be obtained on the wording of such conditions and the
management department should directly liaise with the Legal Adviser (Works) of the
DEVB. EACSB should be informed accordingly of any such endorsement/advice in
the first submission to EACSB.
4.6
The Schedule of Fees
The Schedule of Fees sets out the fees and expenses to be paid to the consultants for
carrying out the assignment, as per the Fee Proposal of the winning consultants or in the
case of direct appointment, as agreed during the negotiation of the agreement. It sets
out the method of payment of the fees and includes provisions for payment for
additional Services or expenses and adjustments in respect of price fluctuations, if any.
The Schedule of Fees will be based on the standard form as given originally in ETWB
TCW No. 23/2003, 23/2003A & 23/2003B, the relevant content of which has been
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Revision No. 14 (October 2014)
subsumed at Appendix 4.2. Reference should also be made to Section 5.3.2 on the
CPI(C) to be used for fee adjustment for inflation. The standard Schedule of Fees
clauses related to the direct employment of RSS are given in DEVB TCW No. 4/2008.
The draft Schedule of Fees should be attached in the EOI invitation document for the
consultants’ reference and comment and should in all cases accompany the Stage 1
EACSB submission.
4.6.1
Payment Schedule
The amount and timing of interim payments should be set out in the payment schedule
given in the Schedule of Fees. The payment schedule should as far as possible closely
match the likely cash flow for the Services provided. Otherwise, the consultant is
likely to incur finance charges which may be reflected in the lump sum fee submitted
for undertaking the assignment. The payment schedule should therefore be carefully
devised to ensure genuine reflection of the likely cash flow taking into account timing
for services to be provided or work to be done. Any comment/feedback from
consultants during the shortlisting/nomination stages should be duly taken into account
with careful consideration of Government’s interest in finalizing the payment schedule.
This can be effected in respect of the following:
4.6.1.1 Payment upon Signing of Agreement
Managing departments should take into account the nature, complexity and size, i.e. the
estimated fee of the Agreement in determining what percentage of the total lump sum
fee should be agreed for payment upon signing of an Agreement. The managing
department should also take into account the following factors:
(a)
The anticipated amount of consultant’s input during the initial period which will
only be remunerated upon the submission of deliverables at a later stage;
(b)
The delivery of expertise/sub-consultants to be engaged for the Agreement;
(c)
The coordination with other purely time-linked payments.
Where it has been agreed by the managing department that a sum of money will be
invoiced by the consultant upon the signing of an Agreement, the amount invoiced
should not normally exceed the following limits:
Consultancy Type
Percentage payment upon signing of Agreement
Feasibility Study /
Investigation
The total lump sum divided by the number of months
allowed for the completion of the consultancy, or 5%
whichever is the higher
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Revision No. 13 (November 2013)
D&C
7% of the total lump sum
IDC
5% of the total lump sum
If the managing department considers it necessary to specify a higher percentage than
the above limits, detailed justification should be provided in the Stage 1 EACSB
submission under the heading “Background/Argument”. While EACSB may comment
on department’s justifications, it is ultimately for the departments concerned to
determine what is the best payment schedule for the purpose of contract management.
4.6.1.2 Purely Time-linked and Milestone Payment
Managing departments should carefully determine the amount of purely time-linked
payments (including the initial payment upon signing of Agreement) to match the
likely cash flow for the Services provided by the consultants. Managing departments
should observe the following guidelines to determine the proportion between purely
time-linked and milestone payments in the preparation of the payment schedule:(a)
The total amount of purely time-linked payments should not be excessive;
(b)
More milestone payments, which should be evenly distributed over the
consultancy period, should be incorporated into the payment schedule as far as
possible;
(c)
In general, the proportion split between purely time-linked and milestone
payments should be a balance of (i) the Government’s interest (only pay for the
part of work done) and (ii) the consultant’s financial burden (unnecessary finance
charges);
(d)
The purely time-linked payments (including the initial payment upon signing of
Agreement) should not normally exceed 30% of the total lump sum. For
avoidance of conflict of interest, construction stage payments should not directly
link with interim payments under works contracts. However, construction stage
payments may link with the progress of works, e.g. percentage of
columns/spans/sections of structures/road surface area completed. They are not
“purely time-linked payments” subject to the 30% limit.
If the managing department considers it necessary to specify a higher percentage of
purely time-linked payments than the above limit, detailed justification should be
provided in the Stages 1 EACSB submission under the heading
“Background/Argument”.
While EACSB may comment on department’s
justifications, it is ultimately for the departments concerned to determine what is the
best payment schedule for the purpose of contract management.
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Revision No. 13 (November 2013)
4.6.1.3 Percentage Split Between Submission and Acceptance of Deliverables
Managing departments should split the deliverable-driven milestone payments into
“submission” and “acceptance” of deliverables to reflect more closely the likely cash
flow corresponding to the consultant’s input. When determining the suitable
percentage split between these milestone payments, the managing department should
consider the following factors:(a) The anticipated amount of consultant’s input into the submission of deliverables of
acceptable quality in comparison with those for the finalization/acceptance of the
deliverables; and
(b) The percentage split of payment for “submission” of deliverables should not be
excessive to a degree which might reduce the incentive for the consultant’s prompt
finalization of the deliverables.
4.6.1.4 Payment Schedules for D & C/IDC Assignments
In order to rationalise the preparation of payment schedules to satisfy both the cash
flow requirements of consultants and the payment retention requirements of
departments, two payment schedule structures are to be applied to D & C/IDC
assignments as follows:Limits
Normal(1)
D& C /IDC
Assignments
Multi-disciplinary(2)
D & C/IDC
Assignments
Investigation/Detailed
Design/Contract
60%
55%
Tender
5%
5%
Construction
30%
30%
Completion
5%
10%
Stages
(1)
Normal D & C/IDC assignments refer to those assignments where there is a minimal
amount of commissioning work towards the end of the project.
(2)
Multi-disciplinary D & C/IDC assignments refer to those assignments where there is
a large amount of commissioning work towards the end of the project.
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Revision No. 14 (October 2014)
Payments within the percentage limits given above will vary depending on the nature
of the particular consultancy assignment. The managing department should ensure that
the structure of payments within the limits to be paid by milestone payments or a
mixture with purely time-linked payments (including payment upon signing of
Agreement), properly reflects the likely cash flow that will be incurred by the
consultant in undertaking the assignment.
For politically sensitive and controversial projects, the project scheme may evolve with
quite some changes after public consultations/engagement to meet public demands
before the finalisation of project scheme. With a higher input expected in the
investigation and design stage, corresponding larger shares of milestone payments may
be provided for these early stages of the consultancy.
For consultancies with phases subject to incorporation mentioned in Section 4.22, the
milestone payments should be drawn up with care so that consultants’ input at early
phases of the consultancy will not be remunerated with milestone payments dependent
on the incorporation.
If the managing department considers it necessary to specify other payment structure,
detailed justification should be provided in the Stage 1 EACSB submission under the
heading “Background/Argument”.
4.6.1.5 Endorsement of the Payment Schedule
The payment schedule should be prepared in a prudent manner for each assignment.
The managing department should conduct a detailed assessment of the likely input by
the consultants and hence the likely cash flow throughout the assignment. The
payment schedule so devised should be endorsed by an officer of D2 rank or above
before incorporation into the Schedule of Fees attached to the EOI invitation document
and the Stage 1 EACSB submission.
4.6.1.6 Comment/Feedback from Consultants on Payment Schedule
The managing department should solicit early comment/feedback from consultants on
the payment schedule given in the Schedule of Fees during the shortlisting stage.
Consultants’ comment/feedback received during the EOI stage and the corresponding
actions taken by the managing department should be included in the Stage 1 EACSB
submission. If in the light of discussion with the shortlisted consultants at the
pre-submission meetings, managing departments consider it necessary to make minor
refinement to the payment schedules, prior approval from their respective Heads of
Department should be sought. Any minor refinement to the payment schedule that had
been approved by the HoD should be brought to the attention of the EACSB in the
Stage 2 EACSB submission.
In the event that substantial changes/modification to the draft documents would have to
be made during the shortlisting/nomination stage, the managing department should
consider whether to conduct the selection and EOI afresh.
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4.7
Revision No. 14 (October 2014)
The Brief
The Brief describes the project and the assignment which the consultants are to
undertake. It should set down clearly the scope and stages of the assignment and all
general and specific requirements and/or constraints.
It should be carefully prepared so that the assumptions, methodology and output are
clearly defined and both the consultants and the employer have a clear and agreed
understanding of the study requirements.
For Feasibility Studies the extreme points in the range of variation of the major
parameters for forming options to be tested must be spelt out clearly. The number of
options expected to be tested within the scope of the study should also be indicated.
The provisions of the Brief must be consistent with those of the GCE, any SCE, and the
other documents comprising the agreement and consideration to the content of these
"standard" documents should be given when formulating the Brief. Unless the special
circumstances warrant the otherwise, according to GCE Clause 22, the consultants
shall exercise all reasonable professional skills, care and diligence in the performance
of the Services, instead of ensuring “fit for purpose”.
The form and content of the Brief will vary according to the assignment. It is prepared
in consultation with all interested offices to whom it should be circulated and whose
agreement should be obtained where appropriate. Also where appropriate it should be
submitted to the project steering or management group for formal agreement.
As originally promulgated in WBTC No. 16/95, it is of utmost importance for the
managing department to write a clear Brief, in order to facilitate the submission of
competitive Fee Proposals, especially lump sum fee. The brief for the consultancy
should be as comprehensive as possible, as any omissions may result in claims from the
consultant. The Brief must give essential information on the nature, scope and
time-scale of the project, including commencement and completion dates, consultant's
duties and responsibilities, phasing, programme and provision of information. Areas of
certainty and uncertainty, alternatives and options should be carefully defined. The
Brief may be modified following the Shortlisting Stage but must be finalised prior to
submission of Technical and Fee Proposals.
In order to enable consultants to quote a lump sum fee competitively, the Brief should
state the reasonable maximum number of external meetings which the consultant will
be expected to attend with regard to District Councils, Rural Committees, Advisory
Council on the Environment etc. Alternatively, the Brief should quote a maximum
number of man-hours to be spent on external meetings. Additional attendance at
meetings beyond that stated in the Brief should then be paid for as additional Services.
The period specified in the Brief for the Consultants to respond to queries after the final
submission of deliverables which should be defined/specified clearly (e.g. submission
of Final Report) should be kept to a minimum, normally not exceeding 3 months.
Response to queries beyond this period should be paid for as additional Services based
on time charges or agreed lump sums.
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Revision No. 14 (October 2014)
Consultants should not be required to provide secretarial services for meetings at which
government officers from the managing department are in attendance, particularly
Project Steering Groups. Consultants should also not be asked to draft Public Works
Sub-Committee or Finance Committee papers, Project Definition Statement or
Technical Feasibility Statement, except when the consultancy itself is for a preliminary
project feasibility study. It should be noted that under Financial Circular No. 4/2012,
works agents are expected to be able to complete a Technical Feasibility Statement
within four months and without recourse to consultancy support, unless a works
director is personally satisfied that consultant input through a feasibility study is
required for a proposed project before he is in a position to recommend that funding be
earmarked and that the project is technically ready for upgrading to Category B in the
Capital Works Programme. Under no circumstances should a consultant be engaged
exclusively for the sake of completing a Technical Feasibility Statement.
For an Investigation stage consultancy, where a separate consultancy for the
subsequent Design and Construction stage may be awarded to another consultant,
provision should be made in the Brief requiring the Investigation stage consultant to
answer queries raised during the Design and Construction stage. These Services, after
the period specified for responding queries, shall be paid for as additional Services in
addition to the lump sum fee for completion of the Investigation stage Services.
For a D & C consultancy or an Investigation Consultancy, as appropriate, provisions
should be made in the Brief to cover the consultant's duty to administer construction
contracts, including dealing with claims, negotiating rates for variations, issuing
variation orders and employment and management of RSS.
The Brief must be consistent with the requirements of the project as approved by
PWSC /FC or other relevant authority. For a D & C consultancy, in addition to the
SCE, break clauses should be incorporated into the relevant Brief clauses. Details are
given at Appendix 4.12.
In the event that substantial changes/modification to the draft documents would have to
be made during the shortlisting/nomination stage, the managing department should
consider whether to conduct the selection and EOI afresh.
For an agreement awarded by direct selection, the Brief should be fully discussed and
agreed with the consultants prior to signing the agreement.
Guidance notes on the preparation of Briefs together with typical formats of Briefs for
Feasibility Study, Investigation, and D & C agreements, as compiled from WBTC No.
11/94 and WBTC No. 11/94A, are given at Appendices 4.3, 4.4, 4.5 and 4.6. It should
be noted that the section headings are mandatory and should remain unchanged. Any
sections that are irrelevant to the study should be stated as “Not-used”. As far as
possible the Brief should comprise a single document without supplementary Briefs
attached as annexes. For an IDC consultancy or a D & C consultancy, terminologies in
typical formats of Briefs should be modified as appropriate if New Civil Engineering
Contract (NEC) form will be adopted for the works contract as promulgated under
SDEV’s memo ref. DEVB(W)506/30/07 dated 3 September 2013.
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Revision No. 14 (October 2014)
In addition to describing the project, the Brief should also cover the following matters :
(a)
the appointment of the Director’s Representative, lines of communication and
day-to-day management; project steering and/or co-ordination group (if
applicable);
(b)
information sources and consultation needs;
(c)
specifications and standards;
(d)
surveys and special investigations;
(e)
completion dates, target dates and milestone events and dates;
(f)
estimates, expenditure forecasts, programmes, and progress reports;
(g)
technical reports, working papers and other documentation;
(h)
delegation of authority to consultants;
(i)
Consultants' office and staff.
4.8
Design Certificate
4.8.1
Background
In the typical brief for a D & C type agreement, there is a requirement that the
Consultant provides, along with the design calculations, a certificate indicating that an
independent in-house check of the design calculations has been carried out. This
certificate is normally submitted before the invitation of tenders. However, additional
calculations and certificates are required for any design work carried out during the
construction stage.
4.8.2
Standard Form of Design Certificate
The standard form of Design Certificate should be used (Appendix 4.7).
4.9
Standard Documents for Direct Employment of Resident Site Staff by
Consultants
Standard documents relating to the direct employment of RSS by consultants include:
-
SCE
-
Schedule of Fee Clauses
-
Schedule of RSS Standards and Duties (Appendix 6.4)
A detailed description on the direct employment of RSS by consultants is given in
DEVB TCW No. 4/2008.
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4.10
Revision No. 9 (August 2009)
Standard Forms
The various documents mentioned above should where possible be used in their
standard forms and any proposals to amend them must be referred to the EACSB.
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4.11
Revision No. 13 (November 2013)
Reimbursable Items
4.11.1 Fair and Open Competition
The EACSB considers that the procedures governing the procurement of reimbursable
items by the consultants under consultancy agreements should be fair, subject to
competition, and should constitute good value for money. To this end the EACSB has
introduced certain arrangements for the procurement of such items.
In the interest of fair and open competition, the procurement of reimbursable items
should be subject to a tendering process as set out below. In this context reimbursable
items procured by the consultants under consultancy agreements are not subject to the
tender procedures set out in Chapter III of SPR.
4.11.2 Definition
A reimbursable item under a consultancy assignment can be defined as any contract,
irrespective of value for the supply of a service or equipment for which the consultant is
reimbursed by Government after having first made payment to the contractor/supplier
from his own funds. It is also known as an out-of pocket expense. A service or
equipment of a reimbursable item should not be supplied by the consultant of the
assignment or its sister firms so as to avoid any actual, apparent, potential or perceived
conflict of interest.
4.11.3 Procedures
(a)
Inclusion of Reimbursable Items in Consultancy Assignments
Prior to deciding whether the procurement of a service or equipment should be by
means of reimbursement, managing departments should first consider if a direct
contract between Government and the contractor/supplier in accordance with the SPR,
would be a more suitable arrangement. The managing departments should provide
their deliberation/decision in the EACSB submissions if they consider the arrangement
of reimbursable items is more suitable.
The total value of reimbursable items should be commensurate with the value of the
consultancy. When the estimated total value of reimbursable items is out of proportion
to the estimated lump sum fee, the items should be procured through direct contract
between Government and the contractor/supplier instead of through the consultant. In
which case, the consultant’s Services for defining of requirements and preparing of
tender documents for these government contracts should be included in the Brief.
Normally, the total value of reimbursable items should not exceed $1.3 million or 20%
of the estimated lump sum fee of the agreement, whichever is less. Exceptionally, for
the procurement of environmental monitoring and audit (EM&A) services, the value of
each reimbursable item (EM&A services contract) should not exceed $5.0 million,
provided the total value of all reimbursable items does not exceed 20% of the approved
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Revision No. 14 (October 2014)
lump sum fee of the agreement. Guidelines on the procurement of EM&A services are
described in Section 4.15.
Where it is not possible to define clearly the scope of item to be reimbursed, the
Director’s Representative should ensure that, as far as possible, a fair and competitive
tendering process is undertaken by the consultant and that the tender sum/rates are
reasonable and present the best value for money. Under normal circumstances, the
tendering should be conducted in accordance with the relevant procedures set out in the
SPR.
The estimated total value of all reimbursable items and details of all individual
reimbursable items should be included in the shortlisting submission to the EACSB.
The details provided should include the nature of the reimbursable item, the estimated
cost, and the programme. A sample summary is given at Appendix 4.8. The EACSB
will note the details and provide guidance, if necessary, when giving approval to the
Shortlist.
(b)
Approval of Reimbursable Items which have already been included in EACSB
submissions.
For any individual reimbursable item which is estimated at less than $1.3 million, the
Director’s Representative named in the Agreement shall have the delegated authority
of the EACSB to approve the appointment of a suitable contractor/supplier which has
been recommended by the consultant, with no further reference to the EACSB.
For reimbursable items with values in excess of $1.3 million but less than $5.0 million,
which have been exceptionally approved by the EACSB (for instance, EM&A
services), the Director of the managing department shall have the delegated authority of
the EACSB to approve the appointment of a suitable contractor/supplier which has
been recommended by the consultant. The EACSB should be informed of the nature
and cost of the reimbursable item and the name of the contractor/supplier.
For any reimbursable item exceeding $5.0 million in value, the approval of the EACSB
shall be sought before the consultant procures the reimbursable item. The Director’s
Representative should submit a recommendation to the EACSB in the form of the
tender report attached at Appendix 4.9 which includes a recommendation for an
approval of the winning tender.
Managing departments should include the estimated total value of all reimbursable
items and the details of the reimbursable items in the documentation which is sent to
the approved shortlisted consultants for the preparation of their competitive proposals.
In providing these details to the consultants, managing departments can assume that all
the consultant’s costs associated with the procurement of the reimbursable items,
together with any financing charges, have been included in the lump sum fee.
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4.12
Revision No. 13 (November 2013)
Computer Facilities
Procurement of computer facilities in consultancy agreements is subject to a number of
requirements. Details are given in WBTC No. 23/2000.
4.13
Quality Management System Certification of Consultants
Consultants undertaking agreements approved by the EACSB need to comply with the
DEVB’s laid down requirements on quality management system certification. Details
are given in WBTC No. 13/2001 and SDEV’s memorandum ref. (025B1) in
DEVB(W)520/83/01 dated 26 January 2010.
4.14
Electronic Dissemination of Tender Documents
Electronic dissemination of tender documents is required for works contracts delivered
under consultancies. Details are given in ETWB TCW No. 11/2005.
4.15
Environmental Monitoring and Audit (EM&A) Programme – Arrangement of
Consultancy for Implementation of EM&A for Projects undertaken by
Consultants
4.15.1 Introduction
EM&A work has become a standard requirement for most of the works projects under
the Environmental Impact Assessment Ordinance. The managing department may
need to procure services of an Environmental Team (ET) and/or an Independent
Environmental Checker (IEC) under the EM&A programme. There are many ways of
procuring EM&A services, e.g. procured direct by the managing department, procured
through contractors, procured through consultants etc.
For EM&A services being procured through consultants, Environmental Protection
Department have been consulted and it has been agreed that the following guidelines
should be observed.
4.15.2 General Principle
(a)
In the appointment of EM&A personnel (i.e. ET or IEC) for a particular project,
the managing department need to observe the specific requirements/conditions as
stipulated in the approved EM&A Manual and/or the Environmental Permit of
that project which may vary from project to project depending on the nature and
needs of that individual project.
(b)
The management structure of the EM&A personnel should be established to
ensure impartiality, independence and facilitate proper monitoring on EM&A
works. In general the ET shall not be an associated body of the Contractor while
the IEC shall not be an associated body of any of the Contractor, the Consultant
of the project or the ET.
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Revision No. 14 (October 2014)
4.15.3 Standard Arrangement
The following should be observed if the EM&A is to be conducted under the
assignment, subject to specific requirements stipulated in the approved EM&A Manual
and/or Environmental Permit of that project :
4.16
(a)
Where the ET is not provided under the works contract, the services of the ET
may be included in the lump sum fee of the D & C agreement. If the scope of the
ET services cannot be clearly defined at the stage of inviting Technical and Fee
proposals, the services should be procured as a reimbursable item (It is
considered more appropriate to procure the services as a reimbursable item rather
than as additional Services under the D & C agreement. This is to avoid
perceived or real conflict of interest that may arise from the setting of the scope of
the ET services by the D & C consultant after the agreement is awarded).
However, in case the total value of all reimbursable items is not commensurate
with the value of the D & C agreement, the services should be procured as a
separate contract.
(b)
The services of the IEC should be procured as a reimbursable item. However, in
case the total value of all reimbursable items is not commensurate with the value
of the D & C agreement, the services should be procured as a separate contract.
(c)
All provisions described in the EACSB Handbook, Section 4.11 should be
followed when the services of the ET or the IEC are procured as a reimbursable
item.
Interest on Overdue Payments for Consultancy Agreements
The Conditions of Employment (as may be modified by the Special Conditions)
provide for money due from the Employer to the Consultants to be paid to the
Consultants within a specified period. In the event of failure to make payment to the
Consultant within the specified period, the employer shall pay to the Consultant
interest at the judgement debt rate prescribed from time to time by the Rules of the High
Court (the then Supreme Court) upon any overdue payment from the date on which the
same should have been made. The payment of interest on overdue payment by the
Government is for compensating the consultants for having to borrow money owing to
the overdue payment. In the light of the borrowing rates in the market when
promulgating WBTC No. 8/2001 which has generally been subsumed hereunder and
archived, the then Works Bureau had determined to adjust the interest rate for overdue
payment for consultancy agreement to one per cent below judgement debt rate. This
interest rate is in line with the interest rate in the General Conditions of Contract for
works contract. The standard SCE for interest on overdue payment is given at
Appendix 4.10.
4.17
Safety Training for Resident Site Staff
RSS employed by consultants on public works projects need to receive adequate safety
training and attend safety refresher courses. Details are given in WBTC No. 12/2001.
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Revision No. 14 (October 2014)
Electronic Dissemination of Invitation Documents for Consultancies
Consultants may elect to submit their EOIs and Technical and Fee Proposals in
electronic format. Details are given in WBTC No. 17/2001.
4.19
Electronic Submission of Consultancy Proposals on Removable Media
Electronic dissemination of documents is required for invitation of EOIs, and technical
and fee proposals. Details are given in WBTC No. 31/2001.
4.20
Adherence to Staff Proposals
It should be set out in the consultancy agreement that the consultant shall provide the
staff and manpower input in accordance with the technical proposal made at the
bidding stage, and that the Director’s Representative shall have the right to check the
time-log record of the Consultant’s staff deployed for the consultancy assignment.
Relevant provisions should also be set out in the invitation letter for technical and fee
proposals. Details are given in DEVB TCW No. 1/2014. Express provisions as
promulgated in SDEV’s memorandum ref. (025FA-01-3) in DEVB(PS) 106/43 dated
24 February 2010 should be incorporated into the invitation letter for technical and fee
proposals and the Brief for binding of consultants’ staff resources proposed in
Technical Proposal.
4.21
Professional Indemnity Insurance
Details of the method for determining the Professional Indemnity Insurance (PII) to be
taken out by consultants for providing services in consultancy agreements are given in
DEVB TCW No. 9/2007 and SDEV’s memorandum ref.(02245-01-13) in DEVB(W)
510/34/01 dated 6 October 2009. GCE Clause 47 is deleted and replaced.
4.22
Project Implemented in Phases
Many projects are delivered in phases such as investigation, design, tender and
construction. Sometimes a single consultant may be awarded a consultancy agreement
with more than one phase. However, the project may at a later stage have to be
abandoned or temporarily withheld for some reasons, and in such event, the
consultancy agreement has to be terminated or suspended after the completion of a
certain phase. For instance, a D & C assignment may have to be terminated after the
completion of the design phase due to failure in securing the necessary financial
resources for the tendering and construction phases.
Though there are provisions in the GCE for suspension and termination of a
consultancy agreement, it is considered that provisions for Phases Subject to
Incorporation should also be required in consultancy agreements to cater for projects
under the above circumstances. Details are given at Appendix 4.12.
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4.23
Revision No. 13 (November 2013)
Use of Legal Consultants in Connection with Works-Related Consultancy Studies
This section sets out the policy as promulgated originally under ETWB TCW No.
37/2002 on the use of legal consultants and related matters in connection with
works-related consultancy studies.
In some assignments, there may be substantial emphasis in the Brief for the Consultants
to provide advice on legal matters. Examples include assignments requiring the
Consultants to review existing legislation, to propose changes to the legislation or to
provide special contract drafting services. Given that the Consultants are not lawyers
themselves, the Consultants will not be in a position to provide the legal input unless
they are allowed to engage legal sub-consultant.
The drawbacks of permitting the Consultants to engage legal sub-consultant are that:
(a)
the Government’s ability to monitor the overall provision of legal services from
the private sector, including aspects concerning the quality of the services
provided, fairness of the method of appointment and appropriateness of the level
of fees charged will be hindered; and
(b)
a legal sub-consultant arrangement could be viewed as a “back-door” briefing out
for which the Department of Justice and/or the Legal Advisory Division, DEVB
(LAD(W)/DEVB) could be criticized for failing to monitor and control the
provision of legal services from the private sector.
In view of the above, it is considered inappropriate for departments to engage legal
sub-consultants through their works-related consultants to carry out services which
involve substantial legal input and cases involving special contract drafting services
where the Government’s standard contract forms are not applicable. The relevant parts
of the Brief which involve legal issues should accordingly be excluded from the Brief
and the LAD(W)/DEVB shall be consulted at an early stage of the project on the
appropriate way forward to avoid any delay to the progress of the consultancy study.
The LAD(W)/DEVB may consider that in the first instance legal input may be
provided by the LAD(W)/DEVB directly or if appropriate, legal consultants should be
appointed with the assistance of the LAD(W)/DEVB.
In case that a department is not sure if a project involves substantial legal input, it may
address its queries to the LAD(W)/DEVB. It should however be clarified that in
meeting the Consultants’ obligations under government projects, there may be
situations where the Consultants have to decide issues on their own without influence
from the Employer and in so deciding, legal advice may be required by the Consultants.
For instance, whether or not certain activities fall within the scope of Services to be
provided by the Consultants under a consultancy study. In those circumstances, the
Consultants should take their own independent legal advice as necessary.
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4.24
Revision No. 14 (October 2014)
Site Supervision of Civil Engineering Contracts
To address Independent Commission Against Corruption’s concerns on site
supervision of civil engineering contracts, D & C assignments need to incorporate the
requirements of formulating a Quality Site Supervision Plan into the consultancy Brief.
Details are given in the then SETW’s memorandum ref. ETWB(W) 925/50/01 dated 29
January 2003.
4.25
Review of Preliminary Design before Proceeding with the Detailed Design
It is essential for the managing department to review the preliminary design during the
Review Phase of the D & C assignment and at appropriate junctures when significant
changes to conditions and circumstances are known to have occurred.
The managing department should set up a Review Committee to review the preliminary
design of the project in the form of a layout plan and method statement produced by the
consultant/entrusted works agent of the Investigation Assignment before proceeding
with the detailed design. Provision should be made in the Brief of the Investigation
Assignment requiring the consultant to respond to queries raised during the Design and
Construction stage. Details are given in ETWB TCW No. 19/2003.
4.26
Confidentiality Clauses
In relation to mediation settlements and arbitration awards, Government will introduce
a sanitization period whereby the consultant will have the opportunity to withhold
consent to the release of commercially sensitive information. After the sanitization
period, the consultant will be deemed to have given consent, but they will be informed
before any disclosures to the Public Accounts Committee and they may then request
commercially sensitive information to be disclosed on a confidential basis. Details are
given in ETWB TCW No. 29/2003.
4.27
Ethical Commitment by Consultants
The requirements to enhance ethical commitment of consultants should be followed.
Details are given in ETWB TCW Nos. 3/2004 & 3/2004A.
4.28
Retention of Documents and Inspections
The requirements for retaining documents beyond completion of works contract should
be followed. Details are given at Appendix 4.14.
4.29
Retention of Money Payable to Non-resident Consultants for Settlement of Profits
Tax
The requirements for withholding money out of payments made to non-resident
consultants should be followed. Details are given at Appendix 4.15.
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4.30
Revision No. 13 (November 2013)
Setting Off Money due to the Government from Defaulting Consultants
A set of administrative procedures should be observed when applying the setting off
clause (see Section 4.5(j)). Details are given in the then SETW’s memorandum ref.
(00UH1-01-7) in ETWB(PS) 106/11 dated 12 October 2005.
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5.
FEE REMUNERATION
5.1
General
Revision No. 14 (October 2014)
As originally promulgated in WBTC No. 16/95, the remuneration of consultants for all
stages of an assignment will normally be based on a fixed lump sum that is independent
of the cost of the works. In this normal case the fixed lump sum will be submitted to the
EACSB as a Fee Proposal at the same time as the consultants' Technical Proposal and
the award of the consultancy will be subject to a combined score assessment in
accordance with the method given in DEVB TCW No. 6/2013. Once approved, the
fixed lump sum will not be subject to negotiation. However, if the use of a lump sum is
not feasible, the EACSB may agree to award a consultancy based on time charges.
The remuneration for the employment of RSS is separately dealt with vide Section 6.
5.2
Types of Fee Remuneration
Currently there are two methods of remuneration, fixed lump sum and time charges,
which may be used separately or in combination; and whichever system or combination
is used the aim should be a fair and consistent application of the principles to all
agreements.
(a)
Fixed (lump sum) fee
A lump sum fee will normally be the basis of payment for all agreements and be
determined through competition. If approval is given by the EACSB that a
consultant is to be selected by direct negotiation then the lump sum should be
negotiated using estimated time charge input as the base.
(b)
Time charge fee
This method is usually used in conjunction with the lump sum fee method, to
cover additional unexpected items of Services or when the exact extent of some
part of the Services involved cannot be fully defined in advance. It may also be
appropriate for smaller assignments and particularly those of an unusual nature
e.g. providing intermittent specialist advice. A budgetary ceiling figure is usually
applied to time charge Services, and this should be obtained at the fee submission
stage. Further increases in the budgetary ceiling should be subsequently agreed
by the EACSB whenever any major additional time charge Services are
anticipated which will exceed the current ceiling and the managing department’s
delegated authority for variations under the SPR (see Section 8.2.8).
An old method of remuneration, based on the percentage of cost of works, was used
with IDC agreements prior to the introduction of an element of fee competition in the
system for the selection and remuneration of engineering and associated consultants in
May 1991. The percentage scale included in the standard form of Schedule of Fees
allows for a percentage which reduces inversely in proportion to the cost of works. For
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Revision No. 14 (October 2014)
new assignments, this method shall no longer be used. For existing assignments
adopting this method of remuneration, managing departments should refer to
Appendices 5.2 and 5.3 for fee adjustment measures.
5.3
Fixed (lump sum) Fee
5.3.1
Applicability
This method of remuneration should be used where the scope and duration of the
Services can be clearly defined. It is usually computed from an assessment of the
manpower input. The lump sum fee for a study should be based on the assessed staff
time required to complete the study, combined with any non-staff cost.
5.3.2
Adjustment of Lump Sum Fee for Inflation
Lump sum fee for consultancies of planned duration greater than one year shall be
adjusted to account for inflation. Adjustments shall be made annually to the balance of
the lump sum fee unearned, in accordance with increases and decreases in Consumer
Price Index (C)(CPI(C)). The baseline for inflation/deflation adjustment is subject to
change as deemed necessary by the Census and Statistics Department and will be
announced by DEVB. Currently the October 2009 - September 2010 based CPI(C) is
used.
To ensure that the proposed fees together with any inflation-related payments do not
exceed the Approved Project Estimate (APE) of relevant projects, the managing
departments are required to specify the estimated amount of inflation-related payments
in EACSB submissions so as to satisfy that there would be sufficient funding in the
relevant project vote to cover all fees/payments under the assignment.
5.3.3
Guidelines on Negotiation of Lump Sum Fee
(a)
Direct Selection of a Single Consultant
The lump sum fee for a study should be based on the assessed staff time required
to complete the study, combined with non-staff cost. As far as possible reference
should be made to prevailing market rates in establishing the baseline fee prior to
negotiating with the consultant.
(b)
Additional Services Under An Existing Agreement
Payment for additional Services should accord with DEVB TCW No. 6/2013.
For existing Agreements not subject to this TCW (e.g. commissioned prior to the
TCW taking effect), or in the situation where the bid all-inclusive charge rates
according to this TCW will not apply, the lump sum fee for carrying out
additional Services should be negotiated on the basis of the assessed staff time
required to complete the study, plus non-staff cost. The lump sum fee should be
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Revision No. 13 (November 2013)
negotiated taking into consideration of the duration of Services, the competitive
rates and discounts (if any) offered in the original Fee Proposal, and the
prevailing market rates. Where applicable, the managing department should also
seek to ensure that the estimated and eventually negotiated lump sum fee for the
additional Services would be inclusive of all implications arising from the
proposed additional Services, including any prolongation costs, etc.
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5.4
Time Charge Fees
5.4.1
General
Revision No. 14 (October 2014)
When the scope of additional Services under an existing agreement cannot be defined
prior to its commencement, time charge method should be used. The method of
assessing basic time charge fees shall accord with the Schedule of Fees. When time
charges are used as the basis of remuneration, the consultants shall be required to
maintain detailed time sheets of all staff involved and these should be available for
inspection and audit by Government when required. Receipts and other documentary
proof of related expenditure such as travel expenses, housing etc., should also be made
available as required.
For old agreements adopting the time charge multiplier method, the guidelines given in
Sections 5.4.2 to 5.4.4 should also be observed.
5.4.2
Basic Rates
(a)
Director’s Rate
This is intended to be used only for principals i.e. partners/directors (hereinunder
known as directors for simplicity) of a firm. In practice it is relatively rare for
directors to be used on actual time charge Services, and the rate is more
frequently used to cap the rate for professional staff. The director rate is varied in
accordance with movements in average of D1 salaries of the Directorate scale
and the revised rate is notified by the Secretary, EACSB following any such
movement. Regarding the rate for landscape directors, the managing department
should consult Secretary, AACSB.
(b)
Rates for Professional and Technical staff
The time charge rate for each member of the professional and technical staff shall
be calculated using the actual Annual Salary Cost (ASC) and the Time Charge
Multiplier (M) for additional Services quoted in the consultant’s Fee proposal.
The rate of payment shall be given by:
Hourly Rate = (M x ASC)/1680
"Annual salary cost" is defined as "basic salary including bonus, if any, and the
Consultant's contributions to pension or provident funds". The hourly rate
computation is based on the assumption that the average actual hours worked in
any one year after deductions for all non working time including Sundays, public
holidays, casual leave, and for sick leave and annual leave is 1680 hours. This
enables the consultants to be compensated for such paid but non-productive time
when the rate is applied only to actual productive working time.
No other costs or allowances are to be included in "annual salary cost".
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5.4.3
Revision No. 13 (November 2013)
Reimbursable Disbursements
In addition to the basic rate in respect of "Annual Salary Cost" the consultants may be
reimbursed the actual cost of additional reimbursable benefits such as housing rental,
medical insurance, children's education, overseas leave travel costs and the like. In
assessing the suitability of particular individuals for employment on a time charge
basis, the basis of assessment should be that the overall reimbursement package should
not be more generous than that which Government itself would provide for employing
a person of similar status and circumstances. "Similar status and circumstances" means
of equivalent qualifications, experience, employment terms and family circumstances
(married, number of children etc.). Recognition should also be given in the assessment
to other factors, such as special expertise and "expert" knowledge. The normal method
of assessment of allowances is to calculate them on an annual basis and then divide by
1680 to produce an equivalent hourly rate. These allowances shall be on hourly rate
and reimbursable basis. A sample form of hourly rate calculation sheet is included at
Appendix 5.1.
5.4.4
Application of Rates
It should be noted that the relevant time charge clauses in the standard Schedules of
Fees state clearly that the above basic rates apply in respect of short term and/or
intermittent periods of working and the Director's Representative shall negotiate
reduced rates in respect of long term continuous periods of working. Any continuous
period of full time employment in excess of 3 months for Services of which the scope
cannot be defined in advance is usually considered eligible in this respect.
5.5
Fees in Foreign Currencies
Generally fees are paid in Hong Kong and in Hong Kong dollars. Where some part of
the expense is incurred in foreign currency it is usually converted to HK dollars for
payment purposes in accordance with GCE Clause 30.
However in circumstances where services are to be provided by personnel based
outside Hong Kong and salaried in a foreign currency, approval may be given to the
fees being paid in foreign currency. Where such is the intention, the managing
department should follow the requirements in SPR 465(c) and highlight the proposed
arrangement in EACSB submissions.
5.6
Compulsory Insurance
Under the existing provisions, engineering consultants are required to take out
Professional Indemnity Insurance (PII) at a minimum amount specified in the Brief for
a certain period after completing the contract works covered by the Agreement.
Detailed requirements of the PII are promulgated in DEVB TCW No. 9/2007.
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Revision No. 14 (October 2014)
6.
DIRECT EMPLOYMENT OF RSS BY CONSULTANTS
6.1
Normal Arrangement
Under the normal arrangement the consultants are required to directly employ RSS.
While the employment is a matter between the consultants and their RSS, the
consultants are reimbursed the actual payment made to their RSS subject to an annual
reimbursement ceiling. The annual reimbursement ceiling is the aggregate total of
monthly caps over a 12-month period for all staff actually employed by the consultants
filling the posts on the RSS establishment. The consultants are allowed to remunerate a
member of the RSS an amount different from the caps he accrues under the consultancy
agreement, and the Government will not control the actual amount of salaries and
fringe benefits payable by the consultants to the members of the RSS. Details of
arrangements for direct employment of RSS by consultants are given in DEVB TCW
No. 4/2008.
In August 2005, the then ETWB introduced an RSS database to assist the Director’s
Representative in vetting of the consultant’s proposal for employment of RSS. The
updated details are given in DEVB TCW No. 3/2011.
As promulgated under SDEV’s memo ref DEVB(PS)106/47/1(TC21/2012) dated 19
December 2013, the consultants are required to mandate open recruitment of resident
site staff for consultancy agreements under EACSB and the DCSC where EACSB’s
procedures instead of the quotation procedures are applicable. Technical audits on
consultancy agreements and quality site supervision plans for works contracts which
set out the consultants’ strategy for site supervision should cover the recruitment of
RSS.
6.2
Minimum Qualification and Experience and Duties of Resident Site Staff
According to DEVB TCW No. 4/2008, the managing department should include in the
consultancy agreement a "Schedule of RSS Standards and Duties" stipulating the
minimum qualification and experience required and duties of each of the posts stated in
the notional RSS establishment. The minimum qualification and experience and the
duties may be changed subsequently by mutual agreement between the managing
department and the Consultants to suit prevailing circumstances. The minimum
qualification required, the duties of common ranks of resident site staff to be
undertaken, and the normal minimum experience which could be considered for
adoption as separately promulgated by DEVB are given at Appendix 6.4. However,
the actual criteria to be used in any particular consultancy agreement may be decided
by the respective managing department.
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7.
EXECUTION OF THE AGREEMENT
7.1
Authority to Enter into Agreement
Revision No. 13 (November 2013)
The signing of the formal agreement between Government and the consultants can
proceed as soon as the EACSB's written approval of the terms and conditions is
received from the Secretary, EACSB, funds for employing consultants are available,
and relevant SPR requirements in respect of execution of agreement have been
followed.
7.2
Consultants which are Limited Liability Companies
One of the prior requirements before entering into an agreement with any consultant
who is a limited liability company is that a majority of the voting power in meetings of
the company shall be held by directors who are consulting engineers (or equivalent
professionals of associated professions, e.g. landscape architects in the case of a
landscape architectural firm). The onus is on managing departments before entering
into an agreement with consultants to obtain the consultants' confirmation of this.
Managing departments should check this at the longlisting stage.
7.3
Prevention of Bribery and Declaration of Interest
Managing departments are reminded of the requirements of the clauses in the GCE
relating to Prevention of Bribery and Declaration of Interest. The attention of the
consultants should be drawn to these clauses and in particular consultants should be
requested, prior to entering into any agreement to declare any interest or association
they may have with any contractor, supplier, specialist contractor or subcontractor.
7.4
Preparation of Documents
The documents forming the agreement, namely, the Memorandum of Agreement, the
GCE, the SCE, the Brief and the Schedule of Fees, and, where applicable, the Schedule
of RSS Standards and Duties should be bound together and sealed with wax seal in the
approved manner for preparation of contract documents. If the consultants wish, they
may also attach their seal to the copies that will be signed.
Copies of correspondence exchanged with the Consultants which amend, qualify,
explain or add to the Agreement in someway should be bound into the Agreement.
Extreme care should be taken to ensure that the effect of such correspondence is fully
understood, and that it is not being used to avoid including SCE.
The compilation and sealing of the documents should be carefully checked, usually by
senior accounts staff.
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7.5
Revision No. 14 (October 2014)
Signing the Agreement
The client office should notify the consultants in writing, of the award of the
consultancy (a sample letter is given at Appendix 7.1) and invite them to sign the
formal agreement. The consultants should be reminded of the need for their
representative(s) to bring letters of authorization or other evidence of authority to sign
contracts on behalf of the consultants.
Unsuccessful consultants should also be notified as soon as the results are known (see
Section 3.13).
The Employer's Representative or a public officer at directorate level shall sign the
Agreement for and on behalf of Government, provided authority to sign contracts has
been formally delegated to his appointment.
A duly authorised partner or director of the consultants shall sign or affix the Company
Seal for and on behalf of the consultants.
The signatures of both parties shall be separately witnessed. Any alterations to the
documents shall be initialled by both parties and witnessed.
Two copies of the agreement shall be signed and sealed in the above manner and
checked, usually by senior accounts staff. These copies will be distributed as indicated
in Section 7.6(a).
Three copies of the agreement should be franked "Certified True Copy..... (signature)"
and signed by the person (usually professional grade officer or above) who checked
them. These copies need not be sealed but they should have the date of signing and the
names of signatories and witnesses inserted. These copies will be distributed as
indicated in Section 7.6(b).
7.6
Distribution of Documents
(a)
A signed and sealed copy should be lodged with :
- Consultants
- Employer's Representative
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(b)
Revision No. 8 (December 2007)
A certified true copy should be sent to :
- Director of Audit
- Senior Treasury Accountant of managing department HQ
- Secretary, EACSB (see also Section 3.12)
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8.
MANAGEMENT OF CONSULTANTS
8.1
General
8.1.1
Purpose of Management
Revision No. 13 (November 2013)
Management of consultants is needed to ensure the timely completion of the Project
and/or the completion of all other intended objectives of the assignment, taking proper
account of the need for adequate liaison with Government and for compliance with the
appropriate government policies and regulations. The most effective management will
generally be achieved by the adoption of a team approach, recognising that the
consultants are professional advisors and maintaining mutual respect for the points of
view of both parties. One of the more frequent reasons for employing consultants is to
overcome a lack of in-house resources, therefore excessive control will be
self-defeating. The object should be the optimum amount of management to maximise
efficiency.
8.1.2
Principles of Management
Management of the consultants is carried out by the office of the Director's
Representative (or his delegated representative) who is the person authorised to give
instructions or convey Government's decisions and views to the consultants. The
managing office is responsible for ensuring that the consultants comply fully with the
terms and conditions of the agreement. The managing office also forms the point of
contact and liaison for other interested government bureaux/departments, who are
consulted, kept informed and who provide input to the Agreement. Thus management
is an active role requiring input from the government side as well as receiving output
from the consultants.
8.1.3
Role of the Managing Office
(a)
Within Government
The managing office performs all normal duties within Government in respect of
the project to which the consultancy is related, e.g. PWP action, financial control,
quarterly reports, comment on town planning layouts, comment on proposed site
conditions, processing all relevant ordinance procedures for land clearance,
alteration, tree removal etc. After checking the completed contract documents,
the managing office gazettes tenders, submits tender reports prepared by the
consultants to Central Tender Board, notifies award of and signs contracts etc.
Additionally the managing office promotes and controls at all stages, any necessary
two-way liaison between interested government bureaux/departments and the
consultants. In this respect the managing office should act as a screen between the
consultants and client or other offices/departments. It should intercept requests
from other offices which are clearly outside the consultancy brief or responsibility to
answer, or which it can adequately answer directly. It should also deal directly
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Revision No. 13 (November 2013)
wherever possible with requests from the consultants by telephone and/or by
meetings followed up by letters of record as a way of cutting down time and
improving efficiency. Only matters outside the managing offices' competence
should be dealt with expeditiously by referral to the competent authority. Where
the Design Stage initially involves developing alternative preliminary designs,
selection of the final design concept may have policy implications and involve
consultation with Policy Bureaux, or the Steering Group, if any. The managing
office should ensure such steps are taken appropriately.
(b)
Monitoring and Administering the Agreement
The agreement is a legally binding document and should be administered as such.
Managing office staff must keep themselves familiar in detail with the
consultant's duties, obligations and benefits and also with the Governments'
duties and obligations under the agreement. They should monitor his compliance
with the agreement and also, to the extent authorised therein, with government
regulations and procedures. Letters on matters of principle under the agreement,
or of a disciplinary nature, should be signed by the Director’s Representative.
Instructions on modifications, extensions to or termination of the agreement
should be given in writing by the Director’s Representative. The consultants may
not proceed from one consultancy stage to the next without the prior written
authority of the Director’s Representative.
(c)
Assisting the Consultants
The managing office should generally assist the consultants in their liaison with
Government, and should take steps to resolve any disputes or difficulties which
may occur. The consultants should as necessary be fully briefed on
Government's structure and on all procedures, and ordinances relevant to the land
clearance - acquisition, investigation, design and construction of the works.
Contact should be promoted between the managing office's and the consultant's
professional and clerical staff on such aspects as financial monitoring and
control, routine accounting and personnel management, etc., to avoid potential
conflict with procedures.
Regarding liaison with other government bureaux/departments, the degree of
direct contact, in either direction, should be controlled by the managing office.
Where direct contact is necessary, the managing office should be kept informed
and be sent copies of all correspondence between consultants and other
departments. On complex projects, the managing office should arrange for each
interested government bureau/department and other organization to appoint a
representative through whom all internal and external matters regarding the
consultancy should be channelled. Details of the contact post, name of
incumbent, telephone number and address should be circulated to all parties and
regularly updated. At the start of the consultancy the managing office should
circulate a letter introducing the consultants to all bureaux/departments they are
likely to contact and enlisting their co-operation.
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8.1.4
Revision No. 13 (November 2013)
Distribution of Documents to Consultants
The officer controlling the consultancy (Project Officer) should prepare a list of the
documents necessary for project implementation using the list at Appendix 8.1 as
guidance. During the circulation of the draft Brief for comment, the Project Officer
should include the proposed List and request information on documents that the
department considers are important from their point of view. The department should
specify the title and contact for the particular documents and these should be added to
the List prepared by the Project Officer.
The Project Officer must supply the List to the shortlisted consultants at the time of
invitation to submit the Technical and Fee Proposals. The consultants should be asked
to indicate, with their submissions, the documents currently held by them and the
documents needed, should they be awarded the assignment.
The documents on the List must be made available to the shortlisted consultants to see,
if they request, during the preparation of their submissions. Any documents which are
on sale should be purchased by the consultants.
During the period of the consultancy, the Project Officer should pass on any
amendments to documents on the List, or new documents which he considers relevant
to the consultancy.
8.1.5
Policy Steering Group
(a)
Need for a Policy Steering Group
Major planning and feasibility studies particularly multi-disciplinary studies will
require the formation of a steering group to ensure optimum achievement of
Government's objectives.
Such studies typically have major external
implications and/or policy guidance is needed during the course of the studies.
(b)
Membership of Policy Steering Group
The policy steering group should consist of representatives of interested
government bureaux/departments, the consultants, and the managing office. Its
members should be of sufficiently high rank to be capable of making decisions if
necessary, at the steering group meetings. The Chairman may be from the policy
bureau responsible for introducing the project into the PWP, up to Deputy
Secretary rank or alternatively someone approved by the policy bureau (e.g. from
the lead department). The managing office will usually provide the secretary to
the steering group, and other representatives as required.
(c)
Terms of Reference
The terms of reference of the steering group should establish clear lines of
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Revision No. 13 (November 2013)
responsibility and accountability. They should be discussed and agreed at the
first meeting of the steering group.
8.1.6
Project Steering Group
(a)
Need for a Project Steering Group
A project steering group may be necessary particularly for Investigation and D &
C agreements where close liaison of a non-policy and/or operational nature is
required between the consultants and various government departments having
extensive inter-related or conflicting interests. This steering group may for
example determine the requirements of the client/user department(s), the
maintenance department(s) and/or of government technical specialists in GEO,
Environmental Protection Department etc.
At the construction stage, the group's function would be to facilitate
implementation of the works, which may involve such things as resolving
problems associated with traffic and utility services.
Project steering committees are required as a matter of policy for all
multidisciplinary projects and such committees may also serve as the project
steering group where consultants are involved in the project.
(b)
Membership of the Project Steering Group
The group should comprise staff of the managing office, the consultants and
representatives of interested departments (and Utilities Companies).
The Chairman may be the managing office's HoD, the Director’s Representative
or a delegated representative of appropriate seniority (usually Dl or above).
Representatives of other departments should be sufficiently senior to speak on
behalf of their departments and give decisions on the spot.
In some cases such as traffic or utilities co-ordination, meetings may be chaired
by the Consultants.
(c)
Terms of Reference
These should state the objectives of the project steering group and establish clear
lines of responsibility and accountability. The terms of reference should be
agreed at the first meeting of the group.
(d)
Frequency of Meetings
The group should meet when required but generally at not less than monthly
intervals.
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8.1.7
Revision No. 14 (October 2014)
Change of Core Personnel in the Consulting Team
The procedures of approving change of core personnel of consulting team were
originally set out in Technical Circular DEVB TCW No. 2/2009. The procedures were
streamlined vide SDEV’s memorandum ref. DEVB(PS) 106/42 dated 14.1.2013 to
improve efficiency and the relevant content of which has now been subsumed at
Appendix 8.2.
Under the streamlined procedures, the HoD can assign a D2 (or above) officer to
approve cases of core personnel leaving the company (including retirement and
resignation) or leaving the post and duties for a prolonged period due to family or
medical reasons. For all other cases, the HoDs may, having regard to the merit of
individual case, personally grant approval. The principle of approving change of core
personnel remains unchanged.
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Detail
8.2.1
Introduction
Revision No. 14 (October 2014)
The nature of management for feasibility studies, planning studies and for the
preliminary report stage of Investigation and D & C type agreements is different from
that required for the detailed implementation of the design and construction of
engineering projects. This is increasingly true as the scope and nature of Feasibility
Studies widen.
Wherever necessary in this Section, distinctions are made between the two different
situations. If no distinction is made it may be assumed that the guidance is relevant to
either situation.
8.2.2
Programme
The managing office should ensure that the consultants submit a realistic overall
programme as required in the agreement, showing the proposed sequence, timing and
working methods proposed for achieving the objects of the Project. For D & C
agreements the programme should also show the timing of the main elements in each of
the consultancy stages and the works contracts, necessary to achieve the desired
completion date for the project. More detailed programmes shall be submitted for each
consultancy stage at its commencement. The programme elements should include for
all necessary government procedures and checking by the managing office of draft
contract documents etc. Adequate time should be allowed for completion of these
procedures and for dealing with objections under relevant ordinances. Managing
offices should scrutinize draft programmes carefully and liaise with the consultants to
ensure that realistic times are allowed for government procedures and input. After
approval by the Director’s Representative the programmes shall become the basis for
control and monitoring of progress.
8.2.3
Progress Reports
The managing office should require the consultants to submit at regular intervals
(usually monthly) a brief report in a format, and of a scope, approved by the Director’s
Representative. The report shall indicate for the previous period, the progress achieved
in relation to the approved programme and also any difficulties encountered. The report
should also mention any guidance or assistance which the consultants may require.
Where there is a steering group, part of its function will be to consider the progress
reports, provide feedback to the consultants, and initiate any necessary follow-up
action. Other bureaux/departments and utility companies etc., having interest or
involvement in the project should be kept informed of the progress by the managing
office.
Where necessary, progress meetings chaired by the Director’s Representative should
be held between the managing office and the consultants, to discuss the progress
reports to decide on follow-up action to be taken and revision to the programme to
recover lost time.
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8.2.4
Revision No. 13 (November 2013)
Supervision, Checking and Reporting on Consultants
Consultants' performance is measured by regular performance reports and by a Final
Report on completion of agreement (see Section 10). Where a particular shortcoming
of the consultants becomes apparent, the managing office should not delay in drawing
this to the attention of the consultants with a view to eliminating the problem as early as
possible.
8.2.5
Payment of Fees
Fees should be paid to the consultants at the times and in the amounts stipulated in the
Schedule of Fees. Where it is necessary for the consultants to carry out additional
Services, these should be instructed in writing by the Director’s Representative.
Payment for such Services shall either be on a time-charge basis using the appropriate
rates and multiplier stated in the Schedule of Fees or by means of a negotiated lump
sum fee.
For the “acceptance” of deliverable which is substantially completed, when the delay in
finalisation is outside the control of the consultants, managing department should
exercise reasonable discretion in considering making the milestone payments. In such
cases, consideration should be given to seek the Director’s Representative’s approval
to make part of the milestone payment and subject to the extent of minor outstanding
finalisation work, 90% or more of the milestone payments may generally be made. It is
mandatory for the Employer to make payment within the specified period of receipt of
invoice from the consultant. Managing offices should note this and particular attention
should be paid to checking and certifying accounts promptly. The date of receipt of the
invoice by the managing department shall be clearly indicated on the invoice. The
payment date shall be accurately calculated and clearly stated on the payment vouchers
by the managing department. The managing department must ensure that consultants’
accounts are checked and certified promptly and that arrangements are made for
payment vouchers to reach the Receipts and Payments Examination Section of the
Treasury timely. Director of Accounting Services should be advised of the payment
due date when forwarding accounts for payment.
8.2.6
Feasibility Reports
(a)
Draft Report
Towards completion of the assignment the consultants shall submit to the
managing office a draft report on the project, containing their recommendation
and other details, as required by the Brief. The report should be circulated by the
managing office to all interested government bureaux/departments for comment.
Consideration should be given to whether the District Council’s views should be
sought at this time. The managing office should check the report for significant
errors and the validity of its conclusions and ensure that it fulfils the requirements
of the Brief. The managing office should pass all comments received to the
consultants and further circulate their response to all parties. Where there is a
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Revision No. 14 (October 2014)
steering group, the consultants should make a detailed presentation of the report to
the group.
The consultants, taking account of all comments received, should then conclude
any remaining investigations, refine their findings and proceed with the
preparation of the Final Report.
(b)
Final Report
Following submission by the consultants of the Final Report incorporating all
significant comments received at the draft stage and the consultant's responses
thereto, the managing office should check that all comments have been
satisfactorily answered and all requirements of the Brief met, before the
Director’s Representative gives his formal acceptance to the Final Report and
distributes it to interested parties for their information. A copy of the Final
Report should be kept in the office library and the relevant departmental library,
for record. In some major projects, an Executive Summary report will be
required as part of the Final Report and such requirement should be specified in
the Brief.
(c)
Follow Up
After distribution of the Final Report, certain follow-up actions will be required
by the managing office. Depending on its nature and relative importance,
consideration must be given to presenting a paper with a summary report
covering the key recommendations of the report to the District Council(s) for
consultation purposes. For development proposals a paper may need to be
submitted to the Committee on Planning and Land Development. Other
committees which may need to be consulted include the Transport Policy
Coordinating Committee and Transport Advisory Committee (for projects with
significant transport implications) and Town Planning Board (projects with
significant planning implications).
8.2.7
Management during Design, Construction & Commissioning
(a)
Regulations and Procedures
The managing office should ensure that the consultants are aware of and, to the
extent authorised in the agreement, comply with all government regulations and
procedures relevant to the agreement. Attention is drawn to Section 8.1.3(c), the
requirements of which should be observed. At the Design and Construction
Stage, Chapters 6 and 7 of the Project Administration Handbook, regarding
"Tender Procedure" and "Contract Management" are particularly relevant. The
consultants should, as far as possible, incorporate government standard forms in
the contract documents e.g. Conditions of Contract, General Specifications,
Method of Measurement etc. The consultants should obtain the approval of the
managing office to any departures from standard procedures/provisions such as
Special Conditions of Contract, Particular Specification Clauses and Particular
Preambles etc.
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(b)
Revision No. 7 (May 2006)
Contract Management
(i)
Management of the contract will be undertaken by the Consultants in their
capacity as the Engineer to the contract. The duties and powers of the
Engineer will be laid down in the Conditions of Contract. The consultants
must be allowed to carry out the duties of the Engineer independently and
impartially, with only those constraints on their contractual powers as are
defined in the GCE. Care should be taken to ensure that other terms of the
Agreement or administrative procedures or requirements do not impose
any additional constraints on the powers of the Engineer.
(ii)
The managing office should monitor closely the consultants' performance
on contract management to see that they act properly and effectively and
that government procedures and regulations are followed. For example,
the use of government standard forms of site records should be verified by
carrying out a technical audit from time to time.
(iii) The consultants should be reminded of the constraints on their contractual
powers, in particular those governing variations to the contract works,
extensions of time for completion and claims for additional payment. The
managing office should ensure that suitable and agreed procedures
including time limit guidelines are laid down and followed, so that all
referrals on such matters from the consultants to the Director’s
Representative for his approval or comment are dealt with expeditiously.
(iv)
The Conditions of Contract provide for payments to the contractor to be
made within a specified time limit after the date of the Engineer's
Certificate. The managing office should ensure that proper procedures
agreed with the Treasury and the Consultants are in place to enable
payments to be routinely made within the contractual time limit.
(v)
The managing office should advise the Consultants when site records and
files should be sent to the managing office for custody after the winding up
of each contract. The agreement requires the Consultants to permit
inspection by Government of records and correspondence relevant to any
contract or other expenditure of Government funds (GCE Clause 14)
(vi)
Where Contract Advisers are intending to carry out a technical audit on
completed contracts, such audits should normally be carried out within 12
months of receipt of the complete set of site records from the Consultants,
and any queries should be put to the Consultants within a reasonable
period of time thereafter.
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(c)
8.2.8
Revision No. 13 (November 2013)
Financial Control
(i)
The managing office should ensure that the consultants are aware of the
time and supporting information which will be needed by the Director’s
Representative when seeking approval for increases in the project
estimate, supplementary provisions to increase annual estimates and
increases in contract sums.
(ii)
As the Engineer to the contract, the consultants can without prior approval
(except as described in GCE Clause 24) order variations to the contract
works and in other ways commit Government to expenditure within the
terms of the contract. The managing office should ensure that the
Agreement contains adequate provisions requiring the consultants to keep
the Director’s Representative fully informed of the financial state of the
contract, including regular updating of the estimated final contract sum,
forecasts of expenditure and immediate notification of any likelihood of
the approved contract sum being exceeded. Formal financial management
arrangements should be agreed between the managing office and the
consultants to ensure that, throughout the course of the contract, necessary
authorities are obtained and funds made available in time to meet
contractual payments.
Variations to Consultancy Assignment
SPR 520 specifies the conditions under which managing departments can authorise
variations to a contract (consultancy agreement). In addition to the original “fee ceiling
for additional Services” approved by the EACSB, managing departments are delegated
with authority to approve variations of consultancy agreements within the financial
limits set out in Appendix V(B) of SPR.
In case the total amount of variations exceeds the original approved “fee ceiling for
additional Services” plus the financial limits under the authority delegated to managing
departments as set out in Appendix V(B) of SPR, the EACSB’s approval to negotiate
with the consultant to undertake the variations is required prior to proceeding with any
further variations (see Section 3.17).
While the full implications that might arise from the proposed additional Services must
always be given careful consideration, the managing department should also be
mindful of situations wherein the instruction of certain additional Services might
unavoidably commit the department to further and related additional Services beyond
the department’s authority at a later stage under the Agreement, albeit well within the
department’s financial authority at the time the particular additional Services is
contemplated and required. Prior approval of the EACSB might need to be obtained at
this stage to avoid otherwise pre-empting the EACSB.
Any agreed variations which are to be paid on a lump sum basis, or on a time-charge
basis but with rates different from the original fee proposal, should be executed under a
supplementary agreement.
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8.2.9
Revision No. 14 (October 2014)
Retrospective Approval of Variations
From a government procurement perspective, prior approval for variations of
consultancy contracts involving additional services under Item B.III of Appendix V(B)
of the SPR must always be obtained before such additional services are committed or
allowed to be undertaken. The practice of seeking covering approval is not
encouraged, and should be strictly controlled to avoid abuse. Such covering approval
would therefore only be given under exceptional circumstances with full justifications.
For such cases, the managing department is required to provide full justifications to
support the covering approval sought for additional Services, and the submission to the
EACSB seeking such approval should include the Controlling Officer’s agreement
concerned.
The department should also confirm in the submission that the subject matter for
approval would not be in connection with or involve any extra-contractual settlement
of claims as such would be outside the jurisdiction of the EACSB according to the SPR.
8.2.10 Variations for Additional Services that are within the Approved Scope of the
Project
For variations falling within the ambit of Item B.III of Appendix V(B) of the SPR
which are within the approved scope of the project, the EACSB’s approval should be
obtained prior to negotiating with the existing consultant for direct single appointment.
Such proposals must be fully justified with due consideration of all relevant
circumstances including the contractual, financial and programme implications, and
presented clearly in the submission for the EACSB’s consideration.
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9.
MODIFICATION TO AN AGREEMENT
9.1
Need
Revision No. 14 (October 2014)
During the course of a study, additional Services or omissions may come to light, or
further extension of Services be recommended, and as a result it may be considered
appropriate to modify or extend the existing agreement.
An existing agreement may also need to be modified due to a change in status of the
consultants, or because of a change in government standards and/or policies. It should
be kept in mind that an agreement is a legal contract and cannot be altered or modified
without the agreement of both parties.
9.2
Submission to EACSB
Where such need arises an approach should be made to the EACSB for approval to the
proposed modification, unless this has already been covered by a general approval as
may be the case with certain policy changes.
9.3
Justification
The approach to the EACSB must include a full justification for the proposed
modification/extension and an estimate of any additional cost. Where additional fees
are involved, approval from the EACSB in principle to the modification/extension
should be sought, prior to any negotiation with the Consultants. Prior approval to any
additional expenditure should have been obtained and this should be verified and
clearly presented in the submission.
Where the modification involves an extension to the Services to be provided under the
Brief, full justification including reasons why this should not be carried out as a new
agreement should be provided. Normally in such circumstances, extensions should be
approved only when the Services are a logical extension of the existing assignment and
difficult to separate from it.
9.4
Negotiation and Execution
Following agreement by the EACSB in principle to any modification, it will generally
be necessary to negotiate the terms, conditions and any additional fees relevant to the
modification or extension, and to obtain EACSB's approval to these prior to executing
the modification. Minor changes may be completed by an exchange of letters, major
changes may require the execution of a supplementary agreement. In some cases legal
advice on the wording of such supplementary agreement may be required and the
managing office should liaise directly with the LAD(W), DEVB.
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9.5
Revision No. 13 (November 2013)
Novation
Novation of consultancy agreements is allowed under one of the following
circumstances:
(a) A consultant has changed from a partnership or sole-proprietorship to a limited
liability company. The obligations, liabilities and benefits under the existing
consultancy agreements are transferred to the new company.
(b) A consultant is being wound up, will soon cease to carry on business or is intending
to wind up his business and is thus unable to perform some or all of the consultancy
agreements. The Government on balance agrees to a novation instead of
terminating the consultancy agreements.
Other than the above circumstances, the transfer of a consultant’s benefits and
obligations under consultancy agreements with the Government to a third party,
including a sister company, a holding company or a subsidiary company having a
separate legal status, will not be permitted. Details on novation of agreements are
given in ETWB TCW No. 3/2005. The guidelines given in SDEV’s memorandum ref.
(0211Y-01-12) in DEVB(PS) 106/43 dated 24 July 2009 are applicable to the
organizational restructuring scenario of one or more consulting companies (the
transferor(s)) integrating into another consulting company (the transferee) by full
transfer of their liabilities, assets, staff and resources to the transferee.
9.6
Change of Company Name
Upon receipt of notification from consultants of a change of company name, the
government department concerned should pass the notification to the Secretary,
EACSB.
The Secretary will then take the matter up direct with the consultants and will seek
confirmation from them on whether there have been any changes in corporate structure
or transfer of ownership as a result of the name change.
If there were no changes in corporate structure nor transfer of ownership in the
company, Secretary, EACSB will notify departments of the name change. Otherwise a
novation of the current consultancy agreements of the company may be required.
9.7
Suspension or Termination
Procedures to be followed if Government wishes to suspend or terminate the
Agreement or any stage of the Agreement are given in Clause 41 of the GCE of
Engineering and Associated Consultants.
If the Government wishes to suspend or terminate the Agreement for any reason the
Director must give the consultants three months notice in writing.
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Revision No. 14 (October 2014)
The Director's Representative must inform the consultants in writing, usually within
3 months or as specified in the brief or the agreed programme, whether or not they are
to proceed to the next stage.
The suspension or termination clauses in the GCE also describe the consultants'
remuneration under such circumstances.
The managing department should submit an evaluation of the consultants' performance
of an agreement on suspension or termination.
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10.
CONSULTANTS' PERFORMANCE
10.1
General
Revision No. 14 (October 2014)
The system of reporting and managing the consultants’ performance is given in DEVB
TCW No. 1/2014.
In order to ensure that consultants perform their duties in accordance with their
Agreements and the Briefs, they must be effectively managed by the managing
departments.
The performance of consultants must be regularly assessed, and an appraisal report for
each current agreement must be made timely by the managing department.
It is essential that the consultant’s performance is assessed and reported accurately such
that the quality of Services can be reflected, and in turn, good value for money Services
can be ascertained.
In cases of unsatisfactory performance, action should be taken by the managing
department in the first instance.
10.2
Consultants’ Performance Information System
Under the consultants’ performance information system (CNPIS), a performance score
for each interim report can be derived based on the assessment made. A weighted
average of the performance scores of a consultant obtained over the immediate past
three years in all consultancies will be taken as the consultant's current Past
Performance Rating (PPR) which provide a quantitative indicator of the consultant's
past performance.
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11.
CONCLUSION OF THE AGREEMENT
11.1
Scope of Assignment Not to Be Exceeded
Revision No. 13 (November 2013)
There is often insufficient attention given to dealing properly with the concluding
stages of an agreement. Authority is given by the EACSB to appoint consultants to
carry out a specific assignment and as soon as the duties under that assignment are
completed, the consultants should be so advised and the agreement officially
completed.
Consultants should not be employed under an existing Agreement to carry out duties
not authorised as part of that assignment and/or for which funds have not been properly
allocated.
11.2
11.3
Summary of Steps to be Followed on Completion of an Agreement
1.
Ascertain that the Services as set out in the Brief have been substantially
completed and notify consultants of any outstanding items.
2.
Process consultants’ Final Account.
3.
Issue Letter of Completion of Agreement.
4.
Complete Final Report on Consultant's Performance.
Completion of Agreement
The managing office must ensure that all Services set out in the Brief have been
substantially completed and the consultants notified of any outstanding items prior to
the issue of the letter of completion. If they have not already done so, the consultants
should be invited to submit their final account, and this should be cleared subject to any
payments in relation to outstanding duties e.g. monitoring, being held back.
Usually with Feasibility Study and Investigation type agreements, the assignment is
complete following submission of the final report including any responses to comments
on the draft final report. There may however in some agreements be additional
monitoring or similar Services of a relatively minor nature which may continue for a
considerable period. Based on the exact nature of the Services required by the Brief,
the managing office must use its discretion to decide when the assignment is
substantially completed, and hence when to issue completion notice and final report.
With a D & C type agreement, the managing department must ensure that the
consultants have: properly drawn up final accounts; resolved any outstanding
contractual matters; produced as-built drawings, maintenance manuals, and
any outstanding design calculations and/or certificates; and preserved site
records. The managing department must also ensure that the works has been
properly handed over to and taken over by the relevant maintenance authority.
Where
necessary,
any
outstanding
items
which
cannot
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Revision No. 14 (October 2014)
be attended to immediately through no fault of the consultant may be included in a
schedule of outstanding items.
11.4
Letter of Completion
The consultants should be notified that they have completed their duties under the
agreement, with the exception of any minor outstanding duties which should be
specifically referred to in the letter of completion. Reference should also be made in
the notification letter to any ongoing responsibilities such as professional indemnity
insurance, keeping of records and the like. A standard form of Letter of Completion is
at Appendix 11.1. This should be copied to Secretary, EACSB and Director of Audit.
The date of the completion should be same as that reported in the Consultants’
Performance Information System (CNPIS), i.e. the Final Report on the Consultants’
Performance.
11.5
Technical Audit on Completed Contracts
The managing office should ensure that all queries on completed contracts requiring
action by the consultants should be made within a reasonable time.
11.6
Final Report on Completion of Agreement
The managing office should on completion of the assignment, complete a Final Report
on consultants’ performance on the agreement in accordance with DEVB TCW
No.1/2014.
11.7
Post-Completion Review on Major Consultancy Agreements
The requirements of post-completion review should be followed. Details are given at
Appendix 11.2.